New Jersey residents thinking about filing bankruptcy often worry about what doing so will do to their credit scores. People tell them (in person or over the Internet) that filing will ruin their credit. Although this is certainly possible, it should not be a barrier to filing. Here's why.
Your Credit May Already Be Bad
You might already have what is generally considered to be bad credit, which means filing bankruptcy will not make it much worse. Anyone thinking about filing should check their scores (all three of them).
If they are all below 600 (even below 630), you don't have much to worry about. Ask yourself this: do you think anyone would lend you money now? If the answer is no, then what do you really have to lose?
If Your Credit is Good, It Won't Be For Long
If your scores are over 700, then you may well take a 100-150 point hit by filing bankruptcy. You are probably current on all of the minimum payments, but see yourself digging a financial hole every month to do so. You are juggling debt, but most likely cannot keep all of the balls in the air at once anymore.
If this sounds like you, then it is only a matter of time for matters to get worse, even if you do not file bankruptcy. You will be unable to make the payments anymore, you will default on the credit accounts, and your scores will go down.
It will get worse before it gets better no matter what, so it is better to rip off the bandage rather than peel it. The sooner you do so, the sooner you can work on your fresh start.
Bottom line: check your scores to see if you have much further to fall if you go bankrupt. That is the only real way to tell.
What Do I Do?
If you are unsure as to whether you need to file, download my free book, Am I In Too Deep? A Guide to Knowing When You Need to File Bankruptcy in New Jersey.
For more information about bankruptcy itself, check out Top Questions People Ask About Filing Bankruptcy in New Jersey.
If you live in southern New Jersey and are considering filing bankruptcy, feel free to call me at 856-432-4113 or contact me through this site for a free consultation in my Woodbury office to discuss your case.