Most people I meet with for initial consultations have questions about how a bankruptcy filing will affect their credit. My initial reaction is to check what damage has already been done to their credit score by the bad debts which are still on their books.
Bankruptcy can stay on your credit report as a negative mark for up to 10 years. However, bad debts can be negative marks for even longer! One of the purposes of bankruptcy is to achieve a ‘fresh start’ financially. My clients are able to establish good credit again because their debts are no longer a huge drag on their monthly budget. Once bad debts are cleared away, clients have a new opportunity to prove they can live within their budget going forward. If they do so, their credit score will improve.
After bankruptcy, instead of paying interest on credit cards, clients are able to buy better food, live in better neighborhoods, and drive safer cars. Making a choice based on a fear of not having credit available is not a good plan. Most of the time, your decision comes down to whether the amount of debt we can clear away through a filing is enough to justify the costs of going through the process. We can figure that out in an initial consultation.