For many Americans facing an overwhelming amount of debt, bankruptcy can serve as a life raft. By discharging applicable debts, filing provides a clean slate, thereby allowing the petitioner to regain their financial footing. Bankruptcy is not without drawbacks, though. If you need debt relief, a reputable bankruptcy attorney will make sure you understand the disadvantages of filing before starting the proceedings. Here is what you should know about one of the biggest drawbacks of discharging debt: the impact it has on credit worthiness. 

A Lower Score

Declaring bankruptcy will likely lower your score by more than 100 points. However, the lower the score at the time of filing, the less dramatic the impact. For example, a 680 prior to discharging debt might drop to a 530. If you have a 780, on the other hand, filing for bankruptcy might leave you with a credit score of 540. That means if your score is already fairly low due to missed payments, a bankruptcy attorney will remind you there is little to lose by filing. 

A Tarnished Report

You can start rebuilding credit as soon as the petition is filed; however, even if your score increases in the years that follow, potential lenders will still be able to see a bankruptcy on your record. This can impact interest rates significantly or prevent you from securing financing altogether. A Chapter 13 bankruptcy typically remains on a credit report for up to seven years. Any debts that are discharged at the end of the payment plan will also remain on your credit report for seven years after the date of discharge. A Chapter 7 filing, on the other hand, can remain on a credit report for up to a decade.  

If you want to discuss your debt relief options with a seasoned bankruptcy attorney in North Carolina, turn to C. Roland Krueger Attorney and Counselor at Law. Located in Lexington, this strategic general practice lawyer has been practicing law for more than four decades. His primary areas of expertise include asset protection, Social Security disability, and traffic violations defense.You can learn more about the legal services he provides by visiting his website. To discuss your financial situation with a bankruptcy attorney, call (336) 248-8464.