What will happen to my credit score if I decide to declare bankruptcy?

Your credit score bankruptcy wise may or may not suffer from the bankruptcy. It all depends on the reasons for filing. Some will receive a discharge with no problems, others will have difficulty in recovering. No two petitioners are the same, nor does everyone have the same reason for filing.

Factors Determining a Credit Score with a Bankruptcy

One of the items that are often ignored in credit issues are medical bills. Many creditors will not consider having collections from medical issues a matter of being a poor risk. They're obtained as a matter of maintaining health as opposed to spending habits. Foreclosures will also affect the credit score differently. As long as the major reason for filing was to get out from underneath a mortgage and not credit cards, the rating will have less of an issue with recovery.

Someone who is filing to eliminate large amounts of credit card debt will generally have a more difficult time in rebuilding. Credit cards are the major vehicle that drive a rating up or down. Defaulting on purchases does not look good for receiving cards in the future. That's not to say it's impossible, just more difficult.

Get a Legal Consultation

It's advisable to talk to a bankruptcy lawyer about the feasibility of returning to near normal credit after a bankruptcy. They'll have plenty of experience with how bankruptcy disrupts financial situations and what may be necessary to rebuild. A lawyer can provide peace of mind when it comes to making the decision on pulling the filing trigger.