Will my Credit be Ruined if I File for Bankruptcy?

What most people don’t realize that are considering filing for bankruptcy is that their credit is already in the tank. The big three credit reporting agencies use different factors when coming up with a credit score. One of the factors that weighs heavily on a credit score is the debt ratio. Prior to filing bankruptcy, most individuals are tapped out on all their available credit making them have very high debt ratios and lowering their credit scores. Added to this, the lack of ability to make payments on time shows up as late pays every month once again dinging their credit score. So when someone overreacts and holds off on filing for bankruptcy because of worrying about how their credit will be reported, it’s very counterproductive. When a debtor is properly advised using a bankruptcy attorney to file for Chapter 7 bankruptcy many times they can leave the bankruptcy filing being virtually debt-free. This of course depends on whether or not the individual filing for bankruptcy has back taxes or some kind of court ordered maintenance payments which are not dischargeable in bankruptcy.

While your credit will not be completely ruined if you file for bankruptcy, it will remain on your credit report for up to ten years for a Chapter 7 bankruptcy and seven years for a Chapter 13. If you have a regular, decent income you will typically find that you can receive credit even after filing for bankruptcy. Most people find they can still purchase an automobile after filing for bankruptcy and can then begin rebuilding their credit from there. Over the past couple years, many individuals exiting bankruptcy report that they are inundated with credit offers shortly after the bankruptcy discharge. Many creditors know that some of these individuals are a very good risk because some of them are close to being debt-free or completely debt-free and it seems like a no-brainer for them. After filing bankruptcy, the individual should take it slow and enjoy living stress-free and bill free. If any questions arise regarding taking on new debt it would be a good idea for the debtor to consult their bankruptcy attorney. As the days pass credit will return and the bankruptcy filing will be far back in the debtor’s rearview mirror.

Getting answers to those tough bankruptcy questions needs to be thought of before you make a decision when it comes to your financial problems. Finding the answers to help you understand your situation more clearly can help you make an informed decision about filing bankruptcy. Take a minute to call or fill out the form to have a FREE NO OBLIGATION CONSULTATION with a bankruptcy attorney in your area.