When a person files for Chapter 7 bankruptcy in Harrisburg all of their non exempt assets are sold. This process is overseen by a trustee of the government. All of the proceeds from the bankruptcy sale then go towards paying off the debts owed. Now of course the proceeds will not be enough to cover the amount of debt owed. The trustee will then contact each of the debt holders and present them with the available cash to pay off the debt.
The end result of a Chapter 7 bankruptcy in Harrisburg is all of a person’s debts are wiped away. They are given a fresh start to their life with zero beginning debt. Now all of this does not come without a consequence. When a person files for Chapter 7 bankruptcy, their credit score takes a major hit. Often times this can mean a drop of 200 to 300 points. On top of that, the negative effects of a Chapter 7 bankruptcy can stay on a person’s credit report for seven to ten years.
Post Bankruptcy
Filing for Chapter 7 bankruptcy is not the end of the world. Yes, the negative effects on a person’s credit report can last up to ten years, but there are actually a lot of things that a person can do to help speed up their recovery. The last thing that any person should do post bankruptcy is just wait for everything to take care of itself.
One thing that a person can do after they have filed for Chapter 7 bankruptcy is to obtain a secured credit card. This is a credit card that has an available line of credit based on the amount of the initial deposit. For instance, if a person deposits $500 into a secured credit card account, their line of credit for that secured credit card will be $500. On a credit report, this type of credit card will have the same appearance as a regular unsecured credit card. A person can then use the secured credit card each month and pay it off at the end of the month. This process will help to increase a person’s credit score faster.
Another way to improve a credit score is to pay all bills on time. Developing a new history of paying bills on time will certainly help to increase a credit score. This includes all utility bills, cable bills, phone bills, etc.
Sometimes the only remaining solution is to file for Chapter 7 bankruptcy. It is not the end of the world. The important thing to remember is to develop a plan to build the credit score back up and stay focused on that plan.
John M Hyams is a chapter 7 bankruptcy in Harrisburg, Mechanicsburg, Hummelstown and the surrounding areas. He caters to both personal and business bankruptcy. The areas that John M Hyams practices include Chapter 7, Chapter 11 and Chapter 13 bankruptcies as well as business law, debtor and creditor law and real estate.
