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Does Filing Bankruptcy Ruin Credit?

Yes, filing bankruptcy will affect your credit score. But then again, so does just about everything else, including when you pay your bills, how much credit you use, how many credit cards you have, and how long ago all of this happened.

Plus, if you're considering bankruptcy, your credit may already be in trouble. In fact, filing bankruptcy may actually make it easier for you to protect your credit by wiping out debts and giving you a fresh restart. With old debts gone, you can start focusing on good credit habits going forward.

That said, your credit history is unique to you. How filing bankruptcy will affect this - and affect your plans for the future - will depend on many factors. Don't let credit fear keep you from clearing your debt and making a positive change in your life. Get answers about how bankruptcy laws may apply to you by speaking with a local bankruptcy attorney.

Transcript on Bankruptcy and Credit Scores

WOMAN CONCERNED ABOUT CREDIT: Sure, these babies have gotten me into big time debt. But bankruptcy? I am not filing bankruptcy and ruining my credit record.

OMG, that would be so embarrassing.

No, I"ll just continue to live beyond my means. At least no one will know about that.

KEVIN CHERN, BANKRUPTCY ATTORNEY: Before filing bankruptcy you look like someone
who has a lot of outstanding debt, who can't afford to pay their bills and could turnaround and
file bankruptcy at any moment.

After filing bankruptcy you have no outstanding debt. You can't file bankruptcy for another eight years. And, for the first time in a while, you have expendable income that you can default towards making payments on debts.

Now you look like a much better risk to a potential creditor, a potential lender than you do before filing bankruptcy.

In fact, recent studies indicate that over ninety percent of debtors coming out of bankruptcy report having received a solicitation from a lender actually indicating that they knew that they had filed bankruptcy.

So remember: Credit is your ability to borrow money and
that may actually improved after you file bankruptcy.

WOMAN CONCERNED ABOUT CREDIT: For serious? Maybe bankruptcy isn't so bad after all. I'm going to TotalBankruptcy.com to learn more.

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