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Bankruptcy's impact on credit is not permanent

Many people in Louisiana find it impossible to make ends meet due to the overwhelming impact of substantial debt. As fees and interest charges mount, it can seem impossible to escape the burden of debt. However, filing for bankruptcy can be an option that allows people to find debt relief, pay off their debts and make their way toward a better financial future. However, a number of widely held beliefs about bankruptcy may inhibit some people from making the decision to file.

Filing for bankruptcy is a serious action that can cause someone's credit score to drop by 200 points. However, the impact on a person's credit score does not last forever. 

While many people believe that a bankruptcy remains on a person's credit report for 10 years or even longer, only Chapter 7 bankruptcy information remains on a credit report for a full 10 years. Other types of information, such as the accounts discharged in bankruptcy or any Chapter 13 bankruptcy information, remain on a person's credit report for only seven years. 

In addition, a poor credit score after bankruptcy does not need to persist for the entire period in which a bankruptcy remains on a credit report. It is possible for someone to achieve a good credit score within four to five years after filing for bankruptcy, especially through secured credit cards, which are based on a security deposit held by the card issuer.

There are a number of alternatives that people can pursue to find a new financial start despite the crushing weight of debt. One option may be a Chapter 13 bankruptcy, which is available for individuals who make too much income to file for Chapter 7 bankruptcy. A bankruptcy lawyer can provide advice as to the next steps to take as well as representation throughout the process of reorganizing a person's debts.

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