Filing bankruptcy should always be your last resort. Most people who end up filing for bankruptcy because they spent beyond their means and weren’t able to pay their bills. Filling bankruptcy allows you to eliminate some of your unwanted debt and wipe the slat clean so that you can get back on your feet again.
For those people who have accumulated debts and cannot pay their bills, filing for bankruptcy is a realistic option. However, filling for bankruptcy will affect your credit.
When it comes to your credit score, the amount of points deducted from your credit is not the same for every person when you file for bankruptcy. Those people who file for bankruptcy you can expects to lose between 100 to 150 points off of your credit score as a result of filing for bankruptcy. If you find yourself under these circumstances, you may need the help of a bankruptcy attorney, who can explain and help you determine what is your best course of action.
A bankruptcy attorney can estimate and give you some advice when it comes to your financial standing. There are a range of points that will get deducted from your credit score due to your financial problems pre and post bankruptcy filing so its best to know the consequences of both action so that you can make a informed decision.
Someone with a high credit score will lose on the higher end of that range, while someone with a lower credit score can expect to lose on the lower end of that range. Those who filed for bankruptcy, will experience stopped payments on some of their bills, missed payments, the entire process can cost them the lost of more than 150 points to their credit score.
Aside from the credit score reductions, the filling of bankruptcy will affects your credit worthiness. The large point deduction that comes with filing for bankruptcy will obviously affect your ability to get credit. Since filing for bankruptcy is breaking a contract that you signed with your lender to pay back your debt. Other banks will view this as a sign that you are a very high risk borrower. This means that you will not receive any kind of mortgage, credit card or auto loan for the first few years after the filling. You can only receive those offers after you slowly rebuild your credit. And the credit offers that you do get will be high interest and low balance offers.
The good news is that the point deduction and general loss of creditworthiness that comes with bankruptcy is not a permanent effect. You can slowly rebuild your credit score through proper money management. Paying all of your bills on time, and using secure credit cards will allow your credit score to slowly build back up.
