There are many consequences associated with owing a significant amount of debt. In addition to the phone calls you may receive from debt collectors and creditors, you may find that falling behind on your payments could also result in threats of foreclosure, creditor harassment and even a garnishment of your wages. These can make your financial situation even more difficult, and you may find yourself growing more hopeless about how you will ever resolve your current situation on your own.
For debt-burdened Tennessee consumers, one option is bankruptcy. This process provides a way to deal with certain types of balances, which may include credit card debt, medical bills, overdue mortgages and more. One concern that people often have regarding bankruptcy is the damage that this could potentially do to credit scores. In reality, it is possible that the benefits of bankruptcy may outweigh the potential damage that this process could do to your credit score.
Steps to fixing your current credit score
A low credit score can complicate your life in multiple ways. You may find that it is more difficult to get a car, apply for housing, open a new credit card and more. If you are successful with these things, your credit score could result in high interest rates that could be difficult to manage. Bankruptcy, while beneficial in many aspects, could harm your credit score. Ways to rebuild your score could include:
- Keep a close eye on your credit score.
- If there are mistakes, make the effort to get them fixed.
- Continue to pay your bills on time and in full.
- Pay off other debts not covered by the bankruptcy process.
- Avoid taking on new debt unless absolutely necessary.
- Don’t take out new credit unless you absolutely need it.
One of the most effective first steps in improving a credit score already harmed by carrying too much debt is to consider bankruptcy. However, you may first benefit from an understanding of all the ways you can address your debt.
Seeking a better financial future
The intent of filing for bankruptcy or improving your credit score is to seek a better financial future for yourself and your family. If you are unsure of what may be best for you, it might be helpful to seek an evaluation of your current financial situation and explanation of the current and most effective options available to you.