Many clients contemplating filing bankruptcy are concerned about the impact of filing on their credit score.  Often they believe a filing will affect their score for 8 years.  In fact, currently a bankruptcy will be part of your financial record indefinitely.  However, often the best way to improve a score in the long term is to file.

Most people who contemplate filing should have done so several years before they do so.  Most have been miserable with anxiety (Not Sleeping at Night, NoFollow) over how to pay their bills, but attempt to hang on out of pride, a sense of obligation, and other admirable excuses.

In reality most have obligations that can never be met and continue to dig themselves into a financial hole.  Once your unsecured debt exceeds an amount that you can realistically pay back in two to three years, it is time to consider a bankruptcy filing.  Without such a filing, your credit score will continue to decline.

A bankruptcy filing will typically eliminate your unsecured debt and allow the process of improving your credit score to begin.  Since you cannot file again for 8 years, creditors will now see you as someone with no unsecured debt and no way to file.  As a result, you become a viable candidate for a loan.