One of people’s chief concerns about filing for bankruptcy is the impact it will have on their credit score. They imagine that it will take years and years to improve their credit score, and the bankruptcy will have an irreversible impact on their ability to apply for loans or undertake other financial transactions in the future.
But the following are a few points worth considering:
- If you’re thinking about filing for bankruptcy, it already means that your finances are in a shaky state; it’s also quite likely that your credit score is quite low or decreasing as your debts mount and you can’t make payments on time (or at all).
- If you don’t file for bankruptcy, but instead continue to struggle with your debts in various ways, you may wind up driving your credit score lower over longer periods of time. It may take longer for your credit score to recover.
- By discharging many of your debts (and in Chapter 13 bankruptcy, by repaying them on a schedule that may work better for you), you can get a fresh start and also a temporary stay against any creditors you still owe money to. Even for debts that can’t be discharged (e.g. child support), you may have an easier time paying them back because you’re freeing up more money by having other debts discharged.
After bankruptcy, there are strategies for rebuilding your credit score relatively quickly. Whether you’re able to do so depends on several factors, including the nature of your debts and also the kind of legal representation you have in bankruptcy court.
If you live in Ohio, be sure to contact an experienced Piqua, Ohio bankruptcy attorney. Your attorney will be able to help you determine whether bankruptcy is the best course of action for you, and if so, how you can best rebuild your life and your finances.