A tragedy may have occurred in one's life, such as the loss of a spouse or a job, or a person may have foolishly over extended their credit and is no longer able to keep up with their debt. The reasons are many and the consequences are severe. Once you've been declared bankrupt, a judge discharges your debts and, to a great degree, wipes your financial slate clean. Sounds easy and simple but it is not. Bankruptcy can be expensive and time-consuming and forever you will feel the stigma of it.
Bankruptcy is a significant credit hurdle, but it can be overcome.
The key to overcoming a bankruptcy is to re-establish credit and show that you are no longer a credit risk. Most people are left only with the option of secured credit cards where they must closely monitor their spending habits so not to over extend themselves again or must suffer from higher interest rates on loans so that they can put themselves on the road to a good credit profile. Because of the volume of information that is being cataloged and entered daily into the credit databases, errors have been known to have happen. . However, one good reason for checking up on your credit report is that someone else may be using your social security number or credit card numbers and playing havoc with your personal credit history. Repossessions are usually noted in your credit report.