Filing bankruptcy offers significant benefits to those struggling with unmanageable debt, including putting an immediate stop to all collection efforts and allowing you to discharge some accounts. Unfortunately, some borrowers who could benefit from bankruptcy protection hesitate, worried that filing will ruin their credit rating forever. While filing will impact your score, the effects are not as serious or long-lasting as many people might think.

How Does Filing Bankruptcy Affect Your Credit?

Creates a Temporary Decrease

Immediately after filing a petition, you will most likely see a dramatic drop in your credit rating, perhaps by a hundred points or more. While this might seem serious, it may not be as harmful to your score as consistently late or missed payments, being sent to collections, or having property repossessed. Over time, being unable to repay debts can cause serious financial damage that is difficult to repair.

Allows You to Rebuild Credit

Depending on the type of petition you file and any applicable state laws, a bankruptcy will typically stay on the record for seven to ten years. However, you can begin rebuilding your credit immediately. Gas cards and store credit cards are relatively easy to obtain and present the opportunity to show you can manage these expenses and work towards a healthy credit rating. In fact, many creditors will be more likely to issue an approval after a bankruptcy, since they know you won’t be able to file again. 

Mark Briden Law in Redding, CA, focuses solely on bankruptcy law, giving them the ability to offer in-depth expertise and dedicated attention to all their clients. With low fees and easy payment plans, this law firm makes filing bankruptcy available to everyone, regardless of their financial situation. To schedule a free in-person or phone consultation, visit their website or call (530) 222-1664 today.