This is a facinating (though long) paper that examines what happens to consumers whose bankruptcies disappear after the 10-year mark. The article can be found here: "http://fic.wharton.upenn.edu/fic/papers/99/9922.pdf" In this paper, consumers with bankruptcies were tracked AFTER their dissappeared from their credit reports at the 10-year mark and found that: A. Their scores saw a big jump when the bankruptcy "fell off" B. The consumers took advantage of their new, higher scores and acquired large credit limits C. After aquiring this NEW CREDIT, these people had a MUCH HIGHER rate of default compared to people (with similar scores) who had NEVER declared bankruptcy. In short what this says, is that once the bankruptcy dissappears from the credit report, people will take advantage of that and immediately begin their old and irresponsible financial habits. It's a strong lesson. Everyone here seems to want those bankruptcies to dissappear, but at the same time, that bankruptcy is keeping these people from getting new credit and getting themselves in trouble again. Steve
ShaleDC, THANK YOU for that one. I found it very interesting! I just read all 35 pages word for word. I had no idea in Canada credit bureaus report the first bankruptcy for 6 years, and a second one for 14 years. I wonder if that will change here someday.
Can't speak for the results of the study but definately have to disagree with this: It's a strong lesson. Everyone here seems to want those bankruptcies to dissappear, but at the same time, that bankruptcy is keeping these people from getting new credit and getting themselves in trouble again. That's a stereotype that shouldn't be applied like a blanket. People aren't wanting the BK to disappear, by and large, they are wanting it reported correctly as required, as well as the associated TL's that were included. Ditto for this: In short what this says, is that once the bankruptcy dissappears from the credit report, people will take advantage of that and immediately begin their old and irresponsible financial habits. I'm betting you've never worn BK shoes or walked that path eh? Sassy
My exact thoughts while I was reading also. Like were drug addicts waiting to get out of treatment. Or we can't wait to get out of jail to commit more crimes. I was just interested in the results and the facts. The comments were kind of out of line, but it was around 6 years ago. Actually it probably just got more people to read it that way.
