One pervasive myth about bankruptcy that I have heard a lot here in South Jersey is that you will have bad credit for seven years if you file. I tell clients that filing bankruptcy is not like breaking a mirror; you don't automatically get seven years of bad credit!

Fact v. Fiction

To some extent this comes from a misunderstanding of the federal credit reporting rules that state that certain debts in default can only be on your credit for seven years before they have to be removed. This does not mean that you will not get credit for this period of time, however. There are lots of things that you can do to rebuild your scores.

In actuality, you will most likely encounter difficulty getting credit for two to three years, depending on how proactive you are in repairing the damage caused by the bankruptcy and the debt problems you had that led up to it.

Rebuilding Your Credit Shortens the Time

Remember, 35% of your FICO score is based on your payment history, so post-bankruptcy on-time payments will help you increase your score depending on how long you are able to maintain them. This can be done with

In addition, another 30% is based on your debt load, which drops dramatically due to the bankruptcy discharge.

Do not let this myth hold you back from the fresh start that you need to get your financial life back on track. If you have bad credit now, it will stay bad unless you do something about it, and bankruptcy could be the best option.

So What Do I Do?

If you live in southern New Jersey and are considering filing bankruptcy, please 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.

If you have more questions about bankruptcy, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.

If you are looking for more information on how bankruptcy might help you with your divorce, then you should download my free book, Top Questions Divorcing Couples Ask About NJ Bankruptcy.

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Steven J. Richardson
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Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.


Richardson Law Offices