When you are unable to keep up with the payments of your debt, you will mostly have to deal either with a charge off or a bankruptcy record on your credit report. While these accounts both have negative effects on your credit rating, they are bound to have varied responses from your creditors and lenders should you decide to borrow money in the future.
It might seem that a charge off will have a lesser negative impact among the two. However, this is not always the case. There are so many factors that might deem one favorable over the other. Getting to know the technicalities that concern charge offs and bankruptcies will give you a clear idea on how to go about dealing with them should there come a time that you will unfortunately have to suffer the consequences of either one of them.
Your creditor has the option to charge off your debt and consider it as a loss if they see that you have not been able to keep up with your payments after about 3 months. A charge off notation can stay in your credit for as long as seven. This will be the case unless you have made some negotiations with your credit to get it removed.
ne very important thing to remember with a charge off is that you will not be spared from the responsibility of paying for it. Your credit can very well still contact you from time to time to remind you of paying for it. Once you have done so, this record will be changed to ?charge off paid? or ?charge off settled?. Although it will still carry a negative connotation, at least it will not be as bad as a ?charge off? account.
A charge off can affect your credit rating big time. The severity of its effect will highly depend on the amount that you owe as well as on how long you have been avoiding your obligation to pay it. When this happens, your creditor can freeze your line of credit and make repeated attempts to contact you to make you pay for your debt. When acquiring loans or credit, such record on your credit report will prevent you from acquiring low annual percentage rates.
The difference of charge offs with bankruptcies lies on the fact that you will be the one who will have to decide and then ultimately file for bankruptcy. Hiring a lawyer will greatly help you in coming up with the necessary arguments in court to deem you qualified for bankruptcy. With bankruptcy, you will be freed from paying your debt.
Depending on the types of bankruptcy that was filed, such record can stay in your credit report anywhere from 7 to 10 years. Initially, it will be very difficult for you to acquire credits and loans. After about 2 years, though, your credit rating will start to rise and you will find lenders who will give you credit.
So that you do not have to deal with charge offs and bankruptcies, it is important that you start to manage and deal with your finances before such problems arise. Dispute erroneous items in your credit report and pay up your obligations. If you are unable to do so, get in touch with your creditor as they might agree to give you payment or settlement plans so you can pay your debt a little easier.
It might seem that a charge off will have a lesser negative impact among the two. However, this is not always the case. There are so many factors that might deem one favorable over the other. Getting to know the technicalities that concern charge offs and bankruptcies will give you a clear idea on how to go about dealing with them should there come a time that you will unfortunately have to suffer the consequences of either one of them.
Your creditor has the option to charge off your debt and consider it as a loss if they see that you have not been able to keep up with your payments after about 3 months. A charge off notation can stay in your credit for as long as seven. This will be the case unless you have made some negotiations with your credit to get it removed.
ne very important thing to remember with a charge off is that you will not be spared from the responsibility of paying for it. Your credit can very well still contact you from time to time to remind you of paying for it. Once you have done so, this record will be changed to ?charge off paid? or ?charge off settled?. Although it will still carry a negative connotation, at least it will not be as bad as a ?charge off? account.
A charge off can affect your credit rating big time. The severity of its effect will highly depend on the amount that you owe as well as on how long you have been avoiding your obligation to pay it. When this happens, your creditor can freeze your line of credit and make repeated attempts to contact you to make you pay for your debt. When acquiring loans or credit, such record on your credit report will prevent you from acquiring low annual percentage rates.
The difference of charge offs with bankruptcies lies on the fact that you will be the one who will have to decide and then ultimately file for bankruptcy. Hiring a lawyer will greatly help you in coming up with the necessary arguments in court to deem you qualified for bankruptcy. With bankruptcy, you will be freed from paying your debt.
Depending on the types of bankruptcy that was filed, such record can stay in your credit report anywhere from 7 to 10 years. Initially, it will be very difficult for you to acquire credits and loans. After about 2 years, though, your credit rating will start to rise and you will find lenders who will give you credit.
So that you do not have to deal with charge offs and bankruptcies, it is important that you start to manage and deal with your finances before such problems arise. Dispute erroneous items in your credit report and pay up your obligations. If you are unable to do so, get in touch with your creditor as they might agree to give you payment or settlement plans so you can pay your debt a little easier.
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