When filing for bankruptcy protection, many consumers are worried about the impact a bankruptcy filing will have on their credit scores. The impact that bankruptcy will have on your credit will depend on a number of factors but, in some cases, bankruptcy can be the quickest route to rebuilding your credit.
Credit Bureaus consider a number of factors when calculating your credit score. Late payments, lawsuits/judgments and other collection actions can have a big negative impact on your credit. Negative accounts can show up on your credit report for up to seven years.
While bankruptcy is not a positive item on your credit report, it can be beneficial to your credit in the long run. A bankruptcy filing stops the reporting of delinquent accounts, eliminates you debts and can stop lawsuits before creditors are able to obtain judgments.
If you are behind on payments or think you might fall behind in the near future, it is important to speak with an experienced consumer law attorney or bankruptcy attorney to discuss your options. If your credit worthiness is a major concern, having a game plan can help you avoid collection actions that will impact your credit for years.