Does Bankruptcy Permanently Ruin Credit?

Many people are under the impression that filing for bankruptcy will permanently destroy their credit. While it’s true that filing for bankruptcy will stay on your credit report for 10 years, filing for bankruptcy is not the end all for your financial future.

Right after you’ve filed and emerged from bankruptcy your credit will not be in good shape. However, that does not mean you won’t be able to rebuild it. Many people have found they were able to start rebuilding their credit within months of emerging from bankruptcy. In fact, people are often surprised when creditors start offering them new lines of credit. But it actually makes sense. Settling your debt, regardless of how, can actually help you build new credit. Now that you aren’t in debt creditors may be more willing to issue you new lines of credit.

You can start by opening a small line of credit. Try applying for a credit card with a low spending limit. Although the interest rate will be high, as long as you keep your spending down your payments will be low, which means you can pay your bills off in full. Paying your bills in full is a great way to improve your credit because it shows you’re financially responsible.

For other ideas on how you can improve your credit after filing for bankruptcy, contact the Law Office of Teresa Beyers to arrange a consultation with an experienced Los Angeles bankruptcy lawyer today!