Atlas Law Firm

Will bankruptcy affect my credit score?


One fear that often holds people back from choosing to file for bankruptcy is the belief that it will have a severe impact on their credit score, but the fact is, people often end up causing worse damage in their efforts to avoid bankruptcy, as they continue to exhaust their credit and fall even further into debt.


There's a negative stigma surrounding bankruptcy, as for most individuals it is viewed as a last-resort financial decision. However, rather than struggling to pay monthly bills that you simply can't afford and risking foreclosure by falling behind on mortgage payments for your home, filing for bankruptcy can be a positive experience that helps you get back on your feet.

One fear that often holds people back from choosing to file for bankruptcy is the belief that it will have a severe impact on their credit score, but the fact is, people often end up causing worse damage in their efforts to avoid bankruptcy, as they continue to exhaust their credit and fall even further into debt.

Instead of allowing this to happen, why not set up a free consultation with an Anoka county bankruptcy lawyer to discuss your options? These professionals can tell you that although bankruptcy will be on your report for up to 10 years, that is only part of the story.

When you file, a court order prevents your creditors from continuing to report negative information to your credit report, so the late payments stop dragging your credit score down. If you continue to make timely payments on the debts you keep – mortgage, auto loans and student loans, for example – those timely payments will be reported to the credit bureaus. This means that if you focus on rebuilding your credit, your credit score can be higher one year after bankruptcy than before you filed.

So the fact that the “public record” portion of your credit report states your bankruptcy filing date for 10 years doesn't mean you're blacklisted from credit for that period of time or that you can't rebuild it quickly. In fact, the industry standard for obtaining a conventional home mortgage after bankruptcy is three to five years, not 10 years.

If you're struggling to pay your bills, you owe it to yourself to explore the options available to you. At Atlas Law Firm, we can help you find a solution to your financial problem and resolve it before it gets worse.

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