BANKRUPTCY AND YOUR CREDIT
A common concern for people considering filing for bankruptcy protection is the effect of the bankruptcy filing on their credit score. Bankruptcy usually lowers your credit score by about 200 points, sometimes even more. Of course, many people considering filing for bankruptcy protection already have damaged credit, so the damage from the bankruptcy is minimal.
Bankruptcy can remain as a stain on your credit history for up to 10 years. However, the worst of the damage is in the first months and years after you file. It is possible to rebuild your credit after bankruptcy.
For example, as part of a bankruptcy, you may decide to continue to pay on some loans, such as an auto loan or mortgage. Continuing to pay these loans during and after bankruptcy will help your credit recover. In addition, you may consider taking on new credit, such as a secured credit card with a low credit limit. Using your new card and making payments on time also helps rebuild your credit. However, you will need to be extremely cautious to avoid accumulating debt again.
If you have questions about how to rebuild your credit, please feel free to contact this office for a consultation.