Will Bankruptcy Ruin My Credit?

If you are considering bankruptcy it is important to first determine if bankruptcy is the best option for you and your family’s situation. The best way to do this is to hire a bankruptcy lawyer who can analyze your case and determine what other options you might have. If you are having difficulties making payments each month and are considering bankruptcy in Miami, look into local bankruptcy lawyers to decide if you even need to file for bankruptcy. If you do determine that filing for bankruptcy is in your best interests, a bankruptcy lawyer is qualified to determine the best type of bankruptcy and protect your credit the best you can.

If bankruptcy is the best solution for your situation, you might be worried about after bankruptcy credit. There are two main types of bankruptcy: a liquidation bankruptcy and a restructuring bankruptcy. How your credit will be affected is dependent on which type of bankruptcy you file. The more money you discharge through bankruptcy, the more your credit score will be affected. You do need to understand that filing bankruptcy will adversely affect your credit. You will have difficulties borrowing money. You will not be able to finance a car or obtain a credit card at first. Employers might not hire you if you apply to work in a field that deals with large amounts of money. Bankruptcy is a very serious decision that can have consequences on the rest of your life. Which is why you should only consider bankruptcy after talking to a bankruptcy attorney and after you have tried everything else. But do not think that bankruptcy will completely ruin your credit forever. After a few years you will be able to rebuild your credit score and after 7 to 10 bankruptcy will fall off your credit score. There are a few steps you can take to rebuild your credit quicker.

The first step is to check your credit score after the bankruptcy has been finalized. You need to make sure all debts that were included in the bankruptcy have been discharged and are listed on your credit report as “included in bankruptcy”. The next step is to start rebuilding good credit. The easiest way to do that is with a secured credit card. These cards are specifically designed for people rebuilding their credit. You will give a deposit to the credit card company which they will hold and extend you an equal line of credit. Other than the deposit, a secured card works the same as a regular credit card and you make regular monthly payments. This type of card will likely have a high interest rate, but if you make payments on time regularly your credit score will go up in no time.

While bankruptcy will drop your credit rating, it does not mean that your credit score is ruined for the rest of your life. If you work hard and make payments on time, you will be able to rebuild your good credit score quickly.