How would a bankruptcy filing affect my credit rating?
Unfortunately, there is no clear answer to this. A bankruptcy filing can stay on a credit report for up to 10 years. If you are contemplating filing bankruptcy, your credit may already be bad and bankruptcy may not make it significantly worse. In some situations, bankruptcy may allow you to improve your credit worthiness faster than you could have otherwise because most of your debts are cancelled. However, there is no guarantee you will be able to get new credit after filing, and it will probably take several years to rebuild your credit. It is important, however, to use such credit wisely. (See the pamphlet, “Using Credit Wisely After Bankruptcy,” available from www.nclc.org.) In addition, with a Chapter 13 case, the discharge (cancellation) of your debts does not occur until the end of the Plan, so you would only have the ability to start rebuilding your credit after the Plan has been completed.
