The truth is, if you are contemplating filing bankruptcy, the chances are your credit has already been ruined.  Bankruptcy will negatively affect your credit.  However, filing bankruptcy gives you the opportunity to recover from a negative credit history far more quickly than if you didn’t file bankruptcy.

For example, if you are constantly late or making sporadic payments on some of your debt, you might be able to continue making late or occasional payments over the period of one, two or even three years.  Once you finally catch up, that is when your credit will start to recover, assuming you have no other debt issues.  This is a way of prolonging the agony of bad credit.  Whereas if you simply file bankruptcy, your credit will begin recovering immediately.

Additionally, your credit will likely recover more quickly because most of your other debt has been eliminated and it will not be counted against you in weighing down your debt to income ratio.  Therefore, for most people, bankruptcy will actually help improve their credit by helping them recover from bad credit far quicker than if they didn’t file for bankruptcy.