One of the things you’ve probably heard about bankruptcy is that it can have a negative impact on your credit score. That can be true, depending on how low your score is due to missed payments and the level of your debt. However, one thing to remember is that your bankruptcy won’t be on your credit forever.
Credit scores are initially impacted by bankruptcies, usually dropping them by around 130 to 200 points, depending on how high your credit score is. If your credit was 700, then you might now have a 500 score, which is very low.
The good news is that you can start rebuilding your credit immediately. Many people are able to repair their credit and see positive changes within just a few months, getting to a decent level within a year or two. At that point, they may also be able to get credit, take out loans and so on.
If you’re filing for Chapter 7 bankruptcy, then the chances are that your credit score is already low due to missed payments. If so, the bankruptcy is less likely to have a significant impact. Over time, the impact of your bankruptcy will be minimized, too. A Chapter 7 bankruptcy eventually falls off the report approximately 10 years later.
Your credit score is important, but being financially stable and able to afford to live is more pressing. Going into bankruptcy may help you eliminate debts that are holding you back, so you can move forward without the need for credit or other loans to help you afford your daily needs. Your attorney will be happy to help you file for the bankruptcy you need.