Most of the bankruptcy myths come from what happens to your credit score. Many people are scared to even think about it but they are important to know. Here are the top myths and the truth about bankruptcy: 

Myth 1: If you have no negative information on your credit score, then you will have a higher post-bankruptcy credit score. 

The Truth: No matter what information is on your credit history, be it positive or negative, there is little you can do to minimize the impact of bankruptcy on your credit score. The presence and length of time it is on your report is the strongest factor in determining your score’s outcome. 

Myth 2: All bankruptcy information stays on your credit report for 10 years with no exception. 

The Truth: The only thing that stays on the public record is Chapter 7 and it lasts for 10 years. All over bankruptcy reference remain for 7 years. Things like third-party collection debts and judgment and tax liens are discharged through bankruptcy. Once you start to clean up previous debts your credit score goes up. 

Myth 3: You will have poor credit as long as the bankruptcy information is on your credit report. 

The Truth: Yes, you can expect a dramatically lower credit score following the bankruptcy. What you can do though is begging to build your credit back up with smart credit management. After about four or five years you may even be able to reach the good credit score range which is 700-749 points. Following bankruptcy, you can immediately begin to build your credit back up. You can get new credit that can help offset the negative information as long as you keep up with it. There are is also the typical making on-time payments for your debt.  

Myth 4: Your credit score will be ruined forever. 

The Truth: Yes, there will be severe damage to your credit score in the short term. You may struggle to get credit for a few years because of it. However, bankruptcy only stays on your credit report for a maximum of 10 years. After that, you won’t have to worry. And you can make your score go up during the 10 years by practicing good management of your money. 

When it comes to talking about bankruptcy you need to find a bankruptcy law firm in Memphis, TN to help you out. Don’t hesitate to contact Darrell Castle and Associates, PLLC for more information about what they can do for you.