Credit Repair v. Bankruptcy: Which is the Right Choice for You?

Credit Repair Florida

TV and radio are inundated with advertisements extolling the virtues of credit repair. You can’t turn the corner without seeing banners promoting credit repair. These ads are willing to promise you the fiscal equivalency of a Willy Wonka Golden Ticket to credit salvation.

These days, credit repair agencies are ubiquitous in Broward, Dade and nationwide. They are extremely skilled at luring you into a false sense of security. Empty promises are made, whereby credit repair will solve all of your problems and finally give you a peaceful respite from those harassing creditors.

Credit repair may increase your credit score if done appropriately, but when a disputed item is removed from your credit file, you still owe on the debt. Credit repair agencies can’t take the place of a Lawyer on your team. An increased credit score will not stop wage garnishments, collection calls, or bank attachments.

Bankruptcy can potentially wipe out your obligation to pay the debt. To clarify further, credit repair agencies simply send a letter to the reporting agencies challenging the accuracies of your credit report. For example, they will point out that a balance on a debt has already been paid, a reported account is not owned by you, or the reporting party no longer owns the debt.

Once challenged, the credit agency contacts the merchant for verification. If said merchant cannot verify the accuracy of the entry, it must be removed. Thus, your credit score may increase, allowing you to take on more debt. That’s the essence of what they can actually deliver.

The right time to consider credit repair is after filing for bankruptcy, not as an alternative to it. If you find yourself struggling with minimum payments that are still too high to make or devastatingly high interest rates, and increased late payments for a debt that is actually owed, bankruptcy may be your only legitimate option.

Bankruptcy might hurt your credit score for a period of time, but it is usually the most effective method to release individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor. 

Excluding cases that are dismissed or converted, individual debtors in Florida receive a discharge in the vast majority of chapter 7 bankruptcy cases. However, keep in mind that there are many exceptions. Bankruptcy is a complex process and can be subject to dispute. That’s why it is absolutely essential to your interests that you contact a competent lawyer before filing to discuss the scope of the discharge.

A fresh start is possible and filing for bankruptcy will not forever ruin your ability to receive credit. Sometimes, bankruptcy is the only long-term solution to resolve your credit woes.