What Happens to Your Credit When You Declare Bankruptcy?

New Jersey bankruptcy lawyer

“Bankruptcy” can be a scary word in the world of finances. Many see it as a rock-bottom approach that only happens in dire situations. Little do they know that bankruptcy may be a very smart financial move – a fresh start with nowhere to go but up! That said, there are various ways that bankruptcy could affect your credit. Let’s take a look at some of those below:

The Bigger You Are, the Harder You May Fall

According to financial experts, most of the damage that your credit could endure is usually proportioned to how good your credit is to begin with. If despite any financial trouble you’ve managed to keep your credit score up and made on-time payments, your credit will see a much larger dip in score versus already having a bad credit score.

How Quickly is My Score Affected?

Your score is affected by a bankruptcy almost immediately after filing for bankruptcy. Creditors waste no time reporting the bankruptcy. On the bright side, the faster it’s on your report, the faster you can get to bring your score back up.

How Long Will My Credit Show My Bankruptcy?

A bankruptcy, regardless of the type, can stay on your credit for well up to ten years.

Will My Score Ever Improve?

As mentioned before, a bankruptcy is not and end but a new beginning. With responsible use and careful planning, your score and general credit will improve overtime. A common tactic that filers take is opening a secured credit card and making regular, timely payments. This can help improve your score with a new, responsible history.

Can Bankruptcy Make My Credit Better?

In an odd way, it could! If your credit is already poor, bankruptcy only marginally affects your credit. If you declare bankruptcy, it’s generally easier to bring your score back up because of the debts that are now discharged. There’s really nowhere to go but up!

Bankruptcy affects different people in different ways. If you are considering bankruptcy and are worried about how it will affect your credit, you should consult an experienced and knowledgeable bankruptcy attorney.


Contact our office today to learn more about how I can help you make a fresh financial start. I offer a free, face-to-face initial consultation at my Cherry Hill office, where you can get your questions answered without obligation. My regular business hours are 8 a.m. to 5 p.m., Monday through Friday. Free parking is available. You can reach me by phone at 856-488-1200 . You can also contact me via e-mail.

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We are licensed to practice in New Jersey and Pennsylvania.

Attorney Joel R. Spivack is an experienced bankruptcy and residential real estate transactions lawyer in Cherry Hill, New Jersey. Clients come to us for legal services, but what we really provide is peace of mind. For more than 30 years, Attorney Spivack has helped people make wise, informed decisions about bankruptcy filings, debt relief options and residential real estate transactions.
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