Will a Bankruptcy Hurt Your Credit? The Surprise Answer

Your credit rating may be more important to you than you think. Your credit rating isn’t just about being able to get a credit card or get a loan for a house or car anymore. A bad credit rating can keep you from renting an apartment, getting utilities, and even getting a job. It may not be fair, but that’s the way it is today. There is reason to fear damaging your credit when financial catastrophe strikes as a result of losing a job or getting sick because of these very negative repercussions.

Many people fear filing for bankruptcy because they believe it will destroy their credit for many years to come. The fact is that what destroys credit is being behind on paying your bills. If you are getting further and further behind on your bills and do nothing, your credit rating will continue to deteriorate. Because of this a bankruptcy can actually improve your credit by stopping the aging of delinquent bills. When you file for bankruptcy it stops the bill aging immediately. For example, if you have a credit card bill that is three months past due, bankruptcy stops it there forever so it never shows up as more than three months delinquent.

Filing for a Chapter 7 bankruptcy can permanently eliminate credit card debt, medical bills, utility bills, and other unsecured debt giving you a new financial start. Once the process is completed, which can be done in as little as three months, you can immediately begin to rebuild your credit. Instead of being a negative, creditors will once again want your business since much of your debt has been eliminated by the bankruptcy and you have more available income. When you pay these bills on time your credit rating will improve.

Before you get so far behind on your bills that your credit rating is damaged too severely, make an appointment for a free consultation to talk to a bankruptcy attorney about your available options. The worst thing you can do is nothing.


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