Will Filing Bankruptcy Ruin my Credit?

If you are considering filing bankruptcy, it is very likely that your credit has already suffered. Thus, filing bankruptcy may not significantly worsen your credit any further. In fact, many individuals who file bankruptcy can often see a rise in their credit scores by about 100 point's within one year of filing. 

My clients often tell me that they receive several credit card offers as soon as they receive their bankruptcy discharge – this is because credit card companies know that those consumers have eliminated all or most of their debt in filing bankruptcy. They also know that those people can’t receive another discharge in Chapter 7 bankruptcy for eight years. It’s no wonder those who file bankruptcy find it much easier to get credit than one might think. 

Although the bankruptcy will remain on your credit report for 10 years, this will not prevent you from reestablishing good credit. Once you have eliminated all or many of your debts by obtaining a discharge in bankruptcy, you are ready to begin rebuilding your credit. It is likely that you will receive credit card offers once you receive your discharge. Accept one or two of these offers. Pay your bills in full every month. Your credit will improve with each payment made on time. If you have sufficient income and have saved sufficient money, after two years you should be able to qualify for a mortgage and buy a house. 

Filing bankruptcy can be the first step toward gaining control of your life and rebuilding your credit. Once you have eliminated most or all of your debt in bankruptcy, you can concentrate more fully on your long-term goals, such as saving for a home, your children’s education, and retirement.