I’m afraid to file bankruptcy – won’t it ruin my credit score?
We’ve all heard the common misconception – if you file for bankruptcy you’ll never be able to apply for credit again. Many people are afraid to file because they’re sure that bankruptcy will ruin their credit score and they’ll be unable to buy a house or move forward with their life later. We’re here to tell you that bankruptcy is not the end! You will be able to recover and build credit again if you decide to file for bankruptcy.
How does bankruptcy affect my credit score?
Declaring bankruptcy will obviously affect your credit score, but the affects vary in the short term. If you have a good credit score and a strong credit history before you declare bankruptcy you will see a large initial drop in your score. This is the case for those who have had a sudden, unexpected difficulty. However, if you have a lot of debt and very few assets then your credit score is probably already low. If that is the case your score won’t be greatly affected, and in some cases it can even go up when you start eliminating debts. This is the case if you’ve been struggling with debt for a long time and you have no way out on your own.
Not sure where you are now? You can safely get your score only from annualcreditreport.com.
In the long term, bankruptcy will only stay on your credit report for up to 10 years. We understand that means this decision should not be taken lightly, but it also means that full recovery is possible! We recommend our clients start working to rebuild their credit history immediately after they’ve discharged their bankruptcy so they are on the road to recovery right away. Our former clients are able to purchase homes and cars, go on vacations and provide for their families. And in many cases they’re able to do this sooner than they ever thought possible.
How can I recover or rebuild my credit score?
Bankruptcy is a clean slate, which also applies to building credit. You’ll be unable to use your previous lines of credit, so it will be more difficult to build credit than it was the first time. However you’ll still have options for low-limit asset-backed credit accounts where you can demonstrate your ability to repay creditors. By simply following good borrowing practices like making payments on time and keeping what you borrow to a minimum you’ll be able to rebuild your credit score. And you’ll be rebuilding without harassing phone calls and stress from debt collectors. You can start seeing improvements within months of discharge!
Want help on your road to financial recovery?
Then we’re the attorney office you want on your team. We pride ourselves on helping our clients all the way to the finish line. We help encourage and advise you all the way to discharge and beyond. Getting started and getting answers are easier than you think, just visit our Get Started page.