Those Considering Bankruptcy in Chicago already have Credit Score Blues; New Beginning a Sigh of Relief
We exercise. We visit the doctor regularly. We eat healthy -- all to preserve our physical health. But taking care of your financial health is every bit as important.
The estimated credit card debt in the United States is nearly $15,000, according to Credit Cards.com. Many blame the recession, the deteriorating housing market and other financial obligations for the increased levels of bad debt in Chicago and elsewhere.
It's evident that many residents are currently struggling with insurmountable debt, including credit card debt, mortgage debt and medical bills. Many times, by the time bankruptcy becomes a consideration, your credit score has already been ruined. Consulting a Chapter 7 bankruptcy lawyer in Chicago can help you start fresh and begin rebuilding a solid credit rating.
In March alone, nearly 145,000 people filed consumer bankruptcy petitions. This number is a 41 percent increase from the near 102,000 filings in February, according to Reuters.
As a result, potential homeowners are finding it difficult to obtain loans.
"Right now, in this economy, credit is essential to getting a mortgage. There are different kinds of mortgages, but credit is a huge factor, along with the value of the property and your income," says Tracy Becker, author of the Credit Solutions Kit and founder of credit restoration company North Shore Advisory.
For those dealing with insurmountable debt, or who are significantly upside down on their home or months behind in payments, consulting with a bankruptcy attorney could be their best course of action. For others, credit score rehabilitation may still be possible short of bankruptcy.
For those who may be looking for a loan to purchase a new house, condo or apartment, it is advised you follow these simple steps:
-Establish a credit history. You need credit to get credit. Those who are new to the credit game may not satisfy a lender as they possess zero record of financial credibility. Most lenders will require that you have a credit history of at least a year prior to applying, or getting approved, for a loan.
-Know your front- and back-end debt. Lenders are interested in how you plan to deal with front-end debt. Front-end debt includes interest, taxes, insurance, loan principle. Lenders require that you show that roughly 30 percent of your gross income can go towards paying off your front-end debt.
-Try to boost your credit score. Ask if a family member or spouse will add your name as an authorized user. This can help boost your score by as much as 60 points.
If you need to speak to a Chicago bankruptcy attorney call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 today for a free debt analysis. Call 800-440-7235.