Will filing bankruptcy ruin my credit?

Credit reporting bureaus will report your filing for no more than 10 years after you file your petition.  In reality, most people who file for bankruptcy already have poor credit histories because of all of their debt.  By discharging most of this debt, an individual’s credit worthiness can actually improve as a result of bankruptcy.  Lending institutions know that an individual cannot file another Chapter 7 bankruptcy for eight years, and it is not unusual for debtors to receive credit card offers shortly after their discharge.  Of course, it is important to be careful in choosing which, if any, such offers to accept, because unmanageable credit card debt is likely one of the factors that led to the need for bankruptcy relief.  As part of the counseling process required before discharge, debtors are empowered to develop a budget and to live within that budget.  Rebuilding your credit is much easier once your debts have been eliminated.  For these reasons, bankruptcy can often improve an individual’s credit rating, rather than damage it.