Will Bankruptcy Ruin My Credit?

One of the biggest hindrances that keep people from filing for bankruptcy is the fear that filing for bankruptcy will ruin their credit. Many consumers believe that bankruptcy is a sign of failure and that it will prevent them from being able to get credit in the future as needed. 

It’s not always a matter of pride and the refusal to accept that you need a solution. It’s usually more a matter of fear and not understanding the process and how it could potentially help your situation. The fact of the matter is that bankruptcy will not ruin your credit. 

It relates back to being properly informed of your options and understanding the process and repercussions before you dive in. There are bankruptcy attorneys who handle these cases for a living so that is truly the best place to start. 

Today, we’re here to answer the question, “Will bankruptcy ruin my credit?” We think you might be surprised at the answer. 

How Bankruptcy Affects Your Credit

The majority of the world views bankruptcy as a sign of defeat. People automatically shy away from the term and many people refuse to even consider it. Commonly, there’s a misperception that if you choose bankruptcy, your credit will be forever ruined. It’s going to ruin your life. 

This is simply not true. 

It’s true that bankruptcy will show up on your credit report for the next 10 years. Anyone who pulls your credit report, whether it’s for a new job or new credit of some sort, is going to see that mark. There are times when it might have an effect but it is not going to prevent you from obtaining credit. 

You’re more likely to have to explain the filing for things like renting a new apartment or purchasing a new car. When it comes to filing for a mortgage, you can still qualify. In fact, many consumers are able to obtain credit a short time after filing. What you will probably notice the most is that you will pay a higher interest rate for credit for things like home and car. 

Consider Your Current Situation

Can we ask you a personal question? What does your credit look like now? Chances are, if you are considering bankruptcy, your credit probably already isn’t very pretty. You probably already deal with struggling to get approvals and you certainly don’t get low-interest rates!

It almost seems a little silly that we worry so much about how bankruptcy could negatively affect our credit score when people considering bankruptcy are probably already in an awful credit position. Chances are, the damage to your credit is already done. So why not work on repairing that damage? 

If your credit has any of the following things, consider how they might affect your credit rating. 

  • Charged-off accounts
  • Foreclosures
  • Missed or late payments
  • Liens
  • Collection accounts

All of these scenarios can ruin your credit. Yes, filing bankruptcy is going to affect your credit but it probably won’t make it much worse than it already is if you’ve reached the point of considering this as a solution. 

Ultimately, bankruptcy can help you start over when it comes to your credit and then you can work to build your credit from there. 

If you compare bankruptcy to other negative credit actions, the results are similar and they stay on your public record or credit for similar lengths of time. It’s easier to bounce back from bankruptcy than it is from some scenarios. 

Make the Call

If you read this and you’re no longer afraid of ruining your credit, this could be a feasible solution. Don’t hesitate to reach out to an Ohio bankruptcy attorney and get the help you need today. 


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