Bankruptcy Myth 6 - Filing Bankruptcy Hurts Your Credit Score Forever

Bankruptcy will not hurt your credit forever. It is a public record that stays on your credit report for up to ten years from the date of filing. Many times, by the time someone files for bankruptcy, their credit is already poor. That poor credit would stay poor until such time as the person was able to dig out, and those negative notations would stay there for seven more years anyway.


Imagine a common scenario of owing $30,000 in credit card debt and you’ve fallen behind on your payments. To make matters worse, now your interest rate has jumped to 29% or more. At 3% minimum payments, you would have to make payments of $900 a month. Even if you could afford that, it would take 6 years and 1 month to pay it off, assuming you did not charge anymore. You’d pay the bank an extra $35,700 for the privilege of rebuilding your credit at that time. Had you filed bankruptcy and saved the $35,700, you would have a great down payment for a house, or be able to buy 2 decent used cars.


Read the full 8 part series of Bankruptcy Myths:

1. Bankruptcy Myth 1 - You Will Never Get Credit or Own Anything Again
2. Bankruptcy Myth 2 - The World Will Know You Filed
3. Bankruptcy Myth 3 - You Will Lose All That You Own
4. Bankruptcy Myth 4 - If you are married, both you and your spouse must file
5. Bankruptcy Myth 5 - Filing for bankruptcy means you are a bad person
6. Bankruptcy Myth 6 - Filing Bankruptcy Hurts Your Credit Score Forever
7. Bankruptcy Myth 7 - After Bankruptcy Creditors will Continue to Harass
8. Bankruptcy Myth 8 - You can only File Bankruptcy Once

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