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There is life after bankruptcy for New Jersey residents

Some New Jersey residents avoid filing for bankruptcy because they believe that it will completely destroy their credit. However, continuing to struggle with overwhelming debt that they are unable to pay will only make matters worse. There is life after bankruptcy, and any existing credit damage can be repaired more quickly than many might think.

More than likely, if a person is considering bankruptcy, his or her credit has already sustained significant damage. Filing for bankruptcy will have an effect on an individual's credit, but it also stops the downward spiral of debt. From this point, the filer can begin to rebuild credit, which will -- in turn -- increase that person's credit score.

When evaluating a person's credit history to determine credit score, a number of factors are taken into consideration. One factor is payment history. Prior to the bankruptcy, a debt will most likely show up as past due, but after discharge, that notation is often removed to reflect the bankruptcy.

Another important factor is the amount of debt an individual has accumulated. Again, after discharge, the debts that are removed by the bankruptcy will no longer be included in calculating the amount of debt a person owes. Over time, the credit score will increase due to these and other post-bankruptcy factors. Furthermore, rebuilding credit with low balances and on-time payments will contribute to a better credit score.

Accordingly, filing for bankruptcy may be exactly what a New Jersey resident needs in order to improve his or her credit. It is not advisable, however, to go through the process alone. The paperwork required is complicated and intimidating. Moreover, there are other requirements that must be met by every filer. If everything is not handled correctly, the case could even be dismissed.

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