Your credit rating

Bankruptcy, alas, is just one more ding.

Restoring your good credit after a bankruptcy is a long uphill struggle.  It is so much of a struggle, in fact, that if your credit rating was the only issue, you might prefer to wait a few years for negative entries to simply “fall off” your credit report.  A bankruptcy stays on your credit report for up to ten years, while the maximum time ordinary delinquencies are reported is seven years.  Further, without bankruptcy or court judgments in your record, many creditors rely most heavily on your record of payment over the most recent two or three years when deciding whether to grant you credit.


For most people who have reached the point of considering bankruptcy, however, the idea of keeping a good credit rating is like a bad joke.  Worry about collection actions, harassing phone calls and making ends meet rightly overrides concerns about an already-ruined credit file.  Besides, easy credit is often to blame for getting us into trouble in the first place.


Bottom line:  Bankruptcy will not help raise your credit score in the short term.  It can help you to get a fresh start and build a new credit reputation over time.