Want want to avoid filing for Bankruptcy at all costs, but if you do have to go down the bankruptcy path then what are severe consequences to your Credit Report, so what other things can damage your Credit Report ?

Collections: When you who funny to your creditors and you get to the unfortunate situation where they have employed a credit collection agency to try and retrieve the debt then this can be marked on your credit report. The good news is that there are many options open to you to explore before you get to this stage, first, try calling up your creditors and explain the situation, you could offer a settle today payment offer where you could offer a percentage like 85% of the total debt to pay today - this could be a good option for the lenders, If you declare yourself bankrupt then they might stand to loose everything.

Charge-Offs: Avoid this also, otherwise referred to as late payments these will start appearing on your Credit Report if you go over the 30 day period that's given to make you regular payment. These details will appear on your Credit Report and possible lenders and this will drastically reduce your chances of gaining a credit. Charge offs remain on your report for up to seven years.

If you don't declare yourself bankrupt then the lender will want to get their money back and will take you to court - this will appear on your report, they will try to sue you. Providing the lawsuit is accurate then this will stay on your report.

If you default on your loan then this also will appear on your report, the lender will repossess your home and then sell it to gain money to substitute the loan - you may also need to sell other assets to repay the loan - this is referred to as chapter 13. When your house gets repossessed then this information will stay on your report for seven years - this information will severely damage your ability to gain credit.

Explore the alternatives to bankruptcy
There many thing you can do to avoid bankruptcy, you may choose to look at debt consolidation - this loan option will consolidate all your loans into one simple monthly repayment for all your debts - this option can reduce the monthly interest rate allowing you to pay less - but be warned - it can have detrimental effaces to your Credit Score. This is because you are effectively closing all your existing loan - A credit score considers loan history and duration - if you keep you accounts open and then steadily pay them off then this is a positive to your credit report as it shows you have paid off the loan over time - if you close these account be choosing a debt consolidate the this information will not appear on your report and the benefit of this history of you paying off you loans will be lost.

Learn more about this author, Matt White.
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