There are fewer things bleaker than never ending debt. Constant phone calls, harassing creditors, threats of garnishment, and no clear path out of the morass are all strong reasons to consider filing for bankruptcy protection. What stops many people from pulling the trigger on filing that paperwork is the question, “will bankruptcy affect my credit?”
The short answer to that question is yes. Bankruptcy will affect your credit, but when you account for ongoing collection efforts and non-payment of your debts, your credit rating is already taking a serious hit from the negative collection efforts. Bankruptcy, while taking a toll on your credit for a significant amount of time, offers at least the ending of your financial nightmare within a decade of your filing. Conversely, ongoing legal and collection efforts will continue to erode your credit standing.
Will Bankruptcy Affect my Credit?
Bankruptcy will affect your credit in several key ways that can have both short term and long term implications for your credit.
- Bankruptcy stays on your credit for 10 years
- Credit score drop of 160 to 220 points
- Difficulty reestablishing credit
- Negatively impact ability to rent
A bankruptcy is not the end of the world, although at times it may seem the case as you work through the process, and the main antidote to that is time.
Find Out More About the Ways Bankruptcy Can Affect Your Credit
If you are worried that filing for bankruptcy might have a deleterious effect on your credit report, you should call our experts at Americor Financial to discuss your full range of options, which includes a realistic assessment of what your current debt picture is doing to your credit rating. While a bankruptcy ding on your record takes a steady toll against your credit rating, it is better than watching the slow deterioration of your credit in the event of aggressive collection efforts.