why clean up if BK is worst negative

[ekelly4200]

I have read plenty here about cleaning up your credit reports after BK. What I dont understand is how past due's etc can be worse than a listed BK. Isn't BK the worst thing you can have on your CR?

[FilingOnMyOwn]

No, like any negative or derogatory info that hits your credit report, it for the most part only takes a massive hit on your score initially then the impact reduces significantly over time. Certain lenders will always decline to lend money to those with bk on their cr, but ALMOST ALL lenders will deny you if you have unpaid collection accounts.

[CindyLou]

An outstanding balance is much worse than a IIB. Especially if you are applying for credit, i.e, a new car---- they want to know that you no longer have those obligations. So, regardless of the score they want to see that.

[HHM]

It's because you credit score is not calculated in a zero-sum manner, its a bunch of ratio's and algorithms...in essence, its a mathematical tapestry. So yes, your credit score takes a hit from BK, but its actually not as bad as many people think, and in some circumstances, (actually quite few), a persons credit score will GO UP upon filing BK, and not go down.

The point of post BK clean-up is really to make sure everything is reported accurately, especially if you have a bunch of old collection accounts and what not, your credit report can get pretty messy if you don't take steps to make sure everything is reported accurately after your BK discharged.

[ekelly4200]

It's because you credit score is not calculated in a zero-sum manner, its a bunch of ratio's and algorithms...in essence, its a mathematical tapestry. So yes, your credit score takes a hit from BK, but its actually not as bad as many people think, and in some circumstances, (actually quite few), a persons credit score will GO UP upon filing BK, and not go down.

The point of post BK clean-up is really to make sure everything is reported accurately, especially if you have a bunch of old collection accounts and what not, your credit report can get pretty messy if you don't take steps to make sure everything is reported accurately after your BK discharged.

thanks everyone for the replies. We were current on everything until we stopped paying when we decided on BK and retained a lawyer back in June. At that point our scores took a 100 point dive. We are now both in the low 500's and some accounts now entering collection. But we should be filed sometimes this week. If we take another hit with the offical Bk then so be it but sure hope not lol.