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Is My Credit Completely Ruined After I Have Declared For Bankruptcy



Deciding to file for bankruptcy is an important decision and will have lasting effects. What exactly happens to my credit after I have declared bankruptcy?

It Is Not Permanent

The good thing about filing for bankruptcy is that after it is all over, the negative effects do not last forever. Typically, the bankruptcy will remain on your credit report, thus influencing it, for at least five to seven years, and will remain in your legal files for around 20 years. In the meantime, a bankruptcy will influence your credit heavily, changing the way you live your life.

What Will Be Different?

Once you have a bankruptcy in your credit history, it will be difficult, if not impossible, to obtain loans of almost any kind. It may also impact your ability to begin a cell phone contract, rent an apartment, or be considered for certain types of jobs. Once you get to the point in your financial recovery after the bankruptcy where you are ready to begin re-applying for credit in the form of credit cards, you will often find that the only ones you will be able to qualify for are those that have very low balances, very high interest rates, and numerous costly fees.

When Will It Change?

As you work to pay your bills on time and rebuild your credit, things will eventually become easier. You will learn new financial habits, and as you near the five to seven year drop-off mark, it will gradually become easier to obtain credit with lower interest rates and more perks. It will not happen overnight though, and it takes dedication, patience, and determination to get through it.

Declaring bankruptcy has its clear advantages but it also has its clear disadvantages, and having a damaged credit history is just one disadvantage. While the five to seven years it takes for the bankruptcy to drop off seems like a long time, you should think of it as an opportunity to improve your financial habits; things will begin to improve gradually during that time, and you will be ensuring a bright financial future for yourself.