Is bankruptcy guaranteed to ruin my credit score? 25 Answers as of October 14, 2011

Yes a bankruptcy does trash your credit score, but generally when someone files bankruptcy, it is already trashed because they can't pay their bills. Once your bankruptcy is over, you can do things like pay your car payment timely, get a secured credit card, etc, to start reestablishing your credit.

Yes, if you had perfect credit and then you filed a bankruptcy, it would do a number on your credit score. However, if you have a lot of debt and are considering bankruptcy, your credit is already wrecked or soon to be. And it will continue to be wrecked, as you tread water or sink even further into debt. When you file a bankruptcy, you are getting a fresh start. It is your start-over point. Right now, you are saddled with these debts and you can't start over. Bankruptcy will actually allow you to start to rebuild your credit.

Bankruptcy is often the quicker way to reestablish credit and improve a credit score. Bankruptcy wipes out debts to provide a clean start and then there are steps one can take to quickly rebound, such as using small lines of credit, keeping a mortgage or installment loan in good standing, and the likes.

Bankruptcy may actually increase your score in some cases. This is why you need a lawyer - to know the real impact.

Most people who file for bankruptcy already have awful credit history and the bankruptcy actually improves the credit score and allows the person to reestablish credit quickly. That would not be possible without eliminating all the debt in bankruptcy. However, if you have excellent credit then filing for bankruptcy will reduce the credit score significantly and the credit will have to be rebuilt after the bankruptcy.

Your credit score will take a hit. If you are in need of bankruptcy you probably don't have the highest credit score anyway. You can rebuild your credit after filing with the use of secured credit cards. I'm not sure what you mean by "ruined" as that sounds rather permanent.

A bankruptcy will appear on your credit report for 8 years after you file the petition, and will be taken into account in calculating your credit score for that period of time.

While your credit score may take a hit from filing bankruptcy, it's usually no worse than the hit that late payments, collections, foreclosure, repossession, or a high debt to income ratio. In fact, for most people, their credit score actually improves after a bankruptcy as you are now considered a better credit risk.

How much a bankruptcy will affect your credit score depends on what your credit is like before you file bankruptcy. If you have accounts that have gone to collections, a repossessed car, or a foreclosed home, then your credit report has probably already been affected negatively. Sometimes if your credit is already low, a bankruptcy might actually help to get rid of all those negative things on your credit. The bankruptcy will last 7-10 years on your credit report but you can start rebuilding your credit as soon as your bankruptcy case closes which can be in as little as 4 months (chapter 7) or 3-5 years in a chapter 13. After bankrutpcy creditors will send you credit offers in the mail, review them some will be okay, others not so great. Definitely the interest rates will be a lot higher than you were used to and the limits a lot lower than you were used to before the bankruptcy. But you start over and whatever you charge you pay off on time, and overtime, before you know it your credit has been re-established. Most people can re-establish their credit 2-5 years after a bankruptcy. Go consult with a bankruptcy attorney, good luck.

Filing bankruptcy will lower your credit score. I don't know of any way to avoid this. You must weigh the good against the bad and do what is best for you. Most people on the threshold of bankruptcy have few choices.

Depending on your current credit score and circumstances, your credit may improve because you filed bankruptcy. Regardless, if you're making decent money and are proactive about about rebuilding your credit score, you can have good credit with 2 or 3 years after filing. So ask yourself, if I don't file bankruptcy today, where will I be in 2 or 3 years? Don't get me wrong, I'm not advocating BK if you don't need it. I just have alot of client's you have been delinquent for many years, have terrible credit, owe more than ever and had they taken the initiative a few years back, they could've been debt free now with good credit scores. Good luck!

In some cases bankruptcy can actually improve your credit score. It all depends on how good (or bad) your credit score is before you file.

No, bankruptcy will materially affect your credit score. So will having your accounts going to collection and having judgments entered, so if you cannot pay your creditors, it is going to be materially affect your credit anyway. The focus should be on getting to the point of getting your situation straightened out so you can rebuild your credit afterwards.

Bankruptcy will improve your credit score over time and is more appealing than a lot of debt that isn't going anywhere.