One of the primary reasons why individuals who are struggling with debt hesitate to file for bankruptcy is that they’re worried about what taking this step will do to their credit. Thankfully, creditors are usually far more interested in someone’s recent financial history than their older approaches. As a result, if you make smart financial decisions for a few years after filing, your credit will likely be far stronger than it is now.
When rebuilding your credit after bankruptcy, you’ll need to focus on paying your debts on time, every time. Consistency is key to rebuilding credit. You’ll also want to take care to keep your debt load relatively low to the amount of credit you have available. Finally, you’ll want to review your credit history – at a minimum – every year to make sure that there are no errors in need of fixing on any of your credit reports.
Focusing on the future
The act of filing for bankruptcy is often a courageous one. It takes guts to stare your debts down and retake control of your financial stability. Just remember that even though there are temporary, negative credit-related consequences associated with the bankruptcy filing process, this effort can serve as a catalyst for a much stronger credit score down the line.
As a result, it is important to learn all you can about the bankruptcy filing process if you’re struggling with debt and seeking relief could make a meaningful difference to your family’s finances. In researching your legal options, you may confirm that – under your unique circumstances – having to rebuild your credit for a time is well worth the benefits that bankruptcy affords.