Financial Regulation News reports on a new study by Lending Tree; which, states that filing for bankruptcy is not as damaging to your long term credit as some think it maybe. The study concluded that people who file for bankruptcy are in the same shape as others who are struggling financially.  This does make sense as when you have  too much outstanding debt you are a one pay check from financial disaster. However, filing for bankruptcy in the past, assuming you have reasonable debt, is only an indicator that you had past financial problems.  So, as the past behavior doesn’t always predict the future, this study does make perfect sense. Also, from my own personal experience, medical debt may not be as damaging as traditional consumer debt.

A study conducted by LendingTree, the nation’s leading online loan marketplace recently determined while a prior bankruptcy filing makes it more expensive to borrow, it is not impossible to qualify for credit. The study references if borrowers wait to apply for new loans a few years after bankruptcy, they may find rates not too far off from what other borrowers are being offered. Investigators said the work involved reviewing loan terms offered to over a million anonymized LendingTree users in 2017, as the groups were split into those who declared bankruptcy within the last seven years and those who had not. A comparison was then conducted based on the types of loan offers both groups received, as a means of determining who got the better deals. The findings showed people recovering from a bankruptcy are in a similar position to anyone who needs to repair their credit standings. There was no indication that people in the aftermath of a bankruptcy will have a harder time accessing credit than their peers who did not file for bankruptcy. Study probes cost of filing bankruptcy

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