Bankruptcy and Your Credit FAQ

Can bankruptcy improve my credit score?

Bankruptcy won’t provide immediate improvement to your credit score, but for many people it can be the quickest way to a better score. Here’s why.

If you are already behind on debt payments, continue to fall further behind, or have accounts in collection, bankruptcy can help get you back on your feet sooner than other types of debt management programs.  That’s because bankruptcy gets rid of many types of debts and provides you with a fresh financial start. When you reduce your debt load and get your finances under control, you can start making loan and credit payments on time, reduce your debt-to-income ratio, and take other steps to rebuild your credit.

If you don’t file for bankruptcy and continue to limp along -- making late payments, defaulting on debts, and increasing the amount of debt you have compared to your income -- you’ll never be able to improve your credit.

Keep in mind, however, that there are ways to get a handle on your debt other than bankruptcy. Check out all the alternatives to see what option is best for you. When in doubt, consult with an attorney.

To learn more about dealing with debt, visit our Debt Management Center.

by: , J.D.

Talk to a Bankruptcy Lawyer

Need professional help? Start here.

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you

Legal Information & Books from Nolo