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Member I

WIll filing bankruptcy ruin my credit score forever?

I've heard that bankruptcy stays on your credit report for decades. Is it possible to repair your credit if you're forced to file for bankruptcy?

4 Comments
Community Manager

WIll filing bankruptcy ruin my credit score forever?

Hi @1kool4skool,

 

We have some great information on our Mint blog that talks specifically about the effects of bankruptcy as well as what life after bankruptcy looks like.

 

There are a handful of ideas of what you can focus on after you file for bankruptcy that can help you recover faster. I especially loved the end of the blog article that mentions, "Bankruptcy is not a death sentence. If you make responsible choices and change the patterns of behavior that landed you in debt, filing for bankruptcy will be nothing more than a short chapter in your financial story."

 

Community Manager

WIll filing bankruptcy ruin my credit score forever?

Hi @1kool4skool

 

In addition to the information I provided, @BigManTinyKingd did a wonderful post about his experience recovering from bankruptcy that might be helpful to you as you learn more about the implications of bankruptcy.

 

@BigManTinyKingd, any other tips or suggestions for @1kool4skool?

Catalyst V

WIll filing bankruptcy ruin my credit score forever?

TO answer the base question, the answer is no. If one is already at a point where they need to file bankruptcy (which should be an absolute last resort) then their credit is already ruined. So filing bankruptcy doesn't ruin that what is already bad. But with a bankruptcy filing depending on the type of bankruptcy (Chap, 7, 11 or 13) and the things involved in the bankruptcy, you won't be borrowing money again for anywhere from 5 to 10 years. Bad credit can be rebuilt. It just takes time. All these advertisements you hear about repairing your credit "overnight" are mostly BS. The only way to improve bad credit, is with time. Just like a wound heals.

Basically a bankruptcy establishes a "start over" point in time where you start building your credit anew. It takes time.

Employee

WIll filing bankruptcy ruin my credit score forever?

@1kool4skool I love the answer provided by @Carl. The gist is, life is by no means over, and it's just going to take patience and hard work to figuratively dig yourself out of the hole. 

 

Sometimes, however, it's helpful to simply remember that it's doable. And how can you know for sure that it's doable? Well, because of the sheer number of people who file for bankruptcy every year (take a look here: https://www.abi.org/newsroom/bankruptcy-statistics)! Surely their credit scores can't be ruined forever, for that outcome would so thoroughly deter filing for bankruptcy that literally no one would do it. 

 

SO, if we agree it's not irreparable damage, the next question is, do you have a game plan to repair your score post-bankruptcy? What do you think your score will fall to post-filing, and what would you like to get it to?