For many people, credit is a very personal thing, and the idea of filing for bankruptcy can be quite intimidating. Often, for those considering it, they wonder how bankruptcy affects their credit. Well, with over 20 years experience as a bankruptcy attorney, I can confidently say that it doesn’t have to be an intimidating process, especially with help. While it’s true, bankruptcy does affect your credit score; it doesn’t leave the long term black mark that you might expect. Let’s take a look at how it does affect your credit.
The Effect Doesn’t Last Forever
It’s not uncommon for folks to be hesitant about bankruptcy because they believe it will “ruin” their credit forever. That just simply isn’t the case. In fact, most people who file for bankruptcy see a credit improvement over the following years. As you are more able to manage your finances and keep up with payments, it’s possible to help your credit bounce back after filing. While the filing does stay on your report, your credit can still make a comeback, and you will be able to further enjoy the fresh start bankruptcy offers.
Starting With a Good Score
First off, yes it’s possible to have a fairly good credit score and still need to consider filing for bankruptcy. For people in this category, you might see a bigger initial drop in your score, however, it’s likely you have the financial savvy to improve your credit in the months and years after filing.
Starting With a Not So Good Score
If your credit score isn’t very good when you file for bankruptcy, you’re likely to see less of a hit. Not only that, but you’ll be in a good place to go nowhere but up afterward! That’s what bankruptcy is meant to do for you, help you start fresh financially and manage credit better in the future.
Your Credit Can and Will Recover
It’s a huge misconception that bankruptcy will prevent the filer from living a normal life ever again – that’s far from the truth. Bankruptcy may be just the tool you need to get your clean slate and have hope for things like getting a mortgage or even keeping your home! While it won’t be an immediate turnaround, you can rebuild your credit after filing for bankruptcy.
File with an Attorney’s Help
One of the most important things you can do for yourself when considering how bankruptcy will affect your credit is to meet with an experienced attorney such as myself. I’m here to help my clients navigate the process and make the best decisions for their financial future. Call today for a completely free initial consultation where we’ll determine the right steps for your unique situation, 651-454-0007.