What is the difference between repossession and bankrupcty and which one is worse?

Answer 1

For any personal credit related concerns I recomment a website that I know has many very good answers to even the toughest questions. It is an 'ask' site directly on Experian's website which is hosted by Maxine Sweet, the V.P. of Public Affairs for Experian. You can get to the site from the following link: http://www.experian.com/ask_max/index.html A repossession is the term applied to action taken on a defaulted vehicle loan. The vehicle, which is the security of such a loan, is either involuntarily repossessed (taken), or voluntarily turned in. Repossession is simply a word. The derogatory credit issue is the fact that repossession only ever follows default of a loan. A bankruptcy is a legal action with its' own set of ramifications and consequences. Consumers file bankruptcy when they are unable to repay debts. As such, it is serious and can impact their credit for up to 10 years from the date of discharge. Because bankruptcy is a legal action, it appears in the "public records" portion of a consumer's credir report. It requires a disposition, either a discharge or an order to vacate (dismissal). Consumers with ANY legal item in the public records portion of their credit (bankruptcy, tax liens, foreclosures and judgments) take larger deductions to their credit scores for all adverse activity during the reporting period. Therefore, a bankruptcy is considered "worse" on a consumers credit than a repossession.