Does bankruptcy ruin your credit rating? 

On Behalf of | Oct 18, 2022 | Bankruptcy

There are still many negative stereotypes that surround the subject of bankruptcy. These are often not based on facts, but on misconceptions. The truth is that anyone can find themselves facing financial hardship through no fault of their own. 

Bankruptcy can give you the chance to wipe out some of your debts and start again. This includes starting again in terms of your credit rating. In the short term, your credit rating will take a knock, but by following these practices, it can soon start to increase again. 

Pay debts that you still have 

Your debts will have been overwhelming before filing for bankruptcy. Now, many of them have been discharged and only a few remain – like student loans. You have a chance to start as you mean to go on and clear your outstanding debts. 

Talk with creditors and see if you can come up with an affordable payment plan. Usually, they are receptive to these conversations. After sticking to the arrangements for a while, you’ll start to notice a positive impact on your credit rating.

Be timely with household payments 

Now that the debts that were dragging you down have been addressed, you can start focusing on the essentials. Your heating bills, electricity bills and cell phone usage all need to be covered each month. 

If you make these payments on time, or even early, your credit will start to improve after only a matter of months. 

If you’re having a hard time financially there is plenty of support out there. Having legal guidance behind you will help ensure that creditors are treating you fairly and acting in accordance with the law.