People who try to pay off their debts instead of filing for bankruptcy often find it takes much longer to restore their credit.

We have always told people that if they were diligent they could rebuild their credit rating in a little as two years. Most people who go into bankruptcy have such a bad credit rating that nothing can make it worse so bankruptcy (or a proposal) offers them the opportunity to start over with a clean slate. By following a few simple rules and steps the discharged bankrupt can start to rebuild his or her credit.

A February 5, 2006 article in the Los Angeles Times expands on this theme, stating: “Here’s the brutal truth.” The article explains that many people who file for bankruptcy are able to boost their credit scores to near-prime levels within three to four years of their bankruptcy discharge. Instead of using their money to pay old bills, they use it to make down payments on homes or cars and get loans that help rehabilitate their credit.

People who try to pay off their debts instead of filing for bankruptcy often find it takes much longer to restore their credit. Lenders are wary of them because of the huge amounts they still owe and because they still have the option of filing bankruptcy.

This entry was posted on Monday, February 6th, 2006 at 11:04 am and is filed under Canadian Bankruptcy News, Credit Reporting. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.