<p><img style="float: right;margin: 8px" src="http://farm4.staticflickr.com/3611/4017841721_2d5bb5319a_m.jpg" alt="" />Bankruptcy has a bad connotation because it suggests that you failed to fulfill your financial responsibilities. But sometimes you need to take a step back when things aren&#8217;t working. Bankruptcy helps you clean out those unsustainable debts. If you work hard you can boost your credit score after bankruptcy.</p>
<h2>Debtor&#8217;s Prison</h2>
<p>People can get into financial trouble due to illnesses, unemployment or bad choices. Sometimes, its not your fault. Eventually, your income just can&#8217;t keep up with your debt.<br />
Centuries ago, debtors were taken to prison when they could not pay their bills. But how can you pay your bills when you are in jail? You can&#8217;t. So, bankruptcy was devised as a more sensible way to modify an untenable debt problem.</p>
<h2>FICO Credit Score</h2>
<p>Your credit score is meant to give financial institutions a way to judge your &#8220;creditworthiness.&#8221; This complex formula includes your types of credit, credit history, availability and missed payments. Debtors are graded in groups based on 10 different categories, including those who filed bankruptcy.</p>
<h2>Heavy Debt is Like a Sickness</h2>
<p>Being overburdened by debt is like being sick. You feel horrible, your body feels tired. Your health deteriorates. You might not be able to sleep. You feel guilty because you are not fulfilling your responsibilities. This debt sickness does not improve until you get your ailment diagnosed by a doctor.<br />
A bankruptcy court helps you diagnose and treat your debt illness with real relief. You get rid of the bad stuff holding you back so that you can get on with your life. You have the potential for financial health thereafter.</p>
<h2>Bankruptcy Offers Relief</h2>
<p>While some debts cannot be discharged through a bankruptcy, many can be removed. This gives you a fresh start. You will have more income available. A bankruptcy will decrease your credit score initially and stay on your record for 10 years.<br />
In the long run, a bankruptcy might help you improve your credit score. You probably already had multiple negative marks on your record &#8211; late payments and collections. The banks judged you to be untrustworthy.<br />
After bankruptcy, you will have a fresh start. The unsustainable debts will be removed. You might be able to increase your credit score by making good financial decisions. Banks must make loans to stay in business. They are making more loans to people with bad credit.</p>
<h2>Recalibrate Your Finances</h2>
<p>When your budget is out of whack, you need a dramatic change. A piano needs to be tuned from time to time. Likewise, your budget needs to be cleaned up.<br />
Bankruptcy can recalibrate your finances. Bankruptcy wipes out a percentage of certain debts to create a manageable debt load. This helps you to be more responsible. Contact a New Jersey bankruptcy attorney to become financially healthy.<br />
Image Credit: Stargazer95050</p>
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<p>Derek is an active finance blogger. When he is not working or relaxing with his family. He enjoys teaching a financial responsibility night class. The article above is for new jersey bankruptcy attorney.</p>