How Bankruptcy Affects Your Credit

San Antonio Bankruptcy Attorney

While many consumers internally struggle with the decision to file for bankruptcy, one of their greatest concerns is how their credit rating will be affected by filing bankruptcy and whether their credit will be so damaged that obtaining credit cards or even auto loans at a high rate would become impossible.

There is some surprising news, in most cases those considering filing for bankruptcy have already suffered damage to their credit, and the damage to their credit score after filing bankruptcy isn’t nearly as bad as they expected. Contrary to popular belief, over the long run rebuilding your credit score high enough where you’re eligible for competitive rates is entirely realistic.

Part of the reason that a consumer debtor’s credit score isn’t likely to suffer too much is that most people struggling with debt aren’t maintaining a good credit score to begin with. With most bankruptcy filers, the debtors already have late payments, high balances, and charge – off or collection accounts on their credit. In light of these common issues, some debtors actually experience a slight boost in their credit score after they have filed for bankruptcy largely because their credit report has been wiped clean after they filed bankruptcy. While one is not likely to expect a big jump, their score shouldn’t dip much either.

Bankruptcy Can Boost Your Credit Over the Long Term

Once you file for bankruptcy, your credit is compared to other bankruptcy filers in the same category as you, and not to those with perfect credit scores, which is much more fair. Credit scores vary widely among bankruptcy filers, some consumers have good FICO scores and some have poor FICO scores. Although you can’t expect to obtain an 850 score while your bankruptcy is on your credit, with good credit management it is entirely possible to get your score in the 700s within 2 to 3 years following a bankruptcy discharge.

If you are currently struggling with crushing debt, it’s a wise idea to contact me, Rick Flume regarding all of your bankruptcy options. With a one-on-one consultation, I can review your circumstances and determine if bankruptcy could dramatically improve your financial condition and offer you the breathing room you need to begin focusing on rebuilding your credit once more. As a San Antonio bankruptcy attorney, I am confident that I can help you find the most reasonable and cost-effective solution to the financial issues that are presently plaguing you.