Certainly filing for bankruptcy will damage your credit score. However, it is a myth that bankruptcy “ruins” your credit for 7 to 10 years. Many of our clients are surprised to find out how quickly their credit score begins to recover after bankruptcy. Also, there are steps you can take to begin to improve your credit score more quickly.

How Much Bankruptcy Will Harm Your Credit Score

There is no set rule as to how much bankruptcy will decrease your credit score, but in general, you can expect a decrease of about 200 to 250 points.

Though, for many people who file for bankruptcy, their credit score was already quite damaged prior to filing. Late payments, charged off accounts, maxed out cards, carrying a high debt load, and lawsuits for unpaid debt all factor into your credit score. Often by the time someone files for bankruptcy their credit score has already been decreased due to these factors.

The truth is that for most people their credit score will improve sooner if they file for bankruptcy rather than continuing forward with a large debt load and late payments.

Reasons Why Your Credit Score Will Improve After Bankruptcy

It seems counterintuitive, but in many cases filing for bankruptcy helps to increase a credit score – at least after the case is over. Once you receive your bankruptcy discharge, you no longer owe any dischargeable debt. Your debt-to-income ratio will be more favorable, making you a more desirable candidate to loan money to.

Further, if you fell behind on your credit card payments prior to filing, then your credit score is being dinged month after month. After bankruptcy, your credit card debt is erased and your score will no longer be taking the monthly hit of late payments.

Your Credit Score is Dictated by the Information in Your Credit Report

The information contained in your credit report dictates your credit score, and your credit score determines your credit-worthiness. The higher your credit score, the more likely it is that you’ll be able to secure loans and lines of credit with favorable terms and low-interest rates.

After bankruptcy, it is crucial that you monitor your credit report. You want to make sure that all of your accounts are reporting as “discharged in bankruptcy” with a zero balance. Also, check for mistakes, misreporting, or signs of identity theft. Learn more in our articles:

If you are deep in debt that you cannot reasonably pay off within the next few years, it is time to consider how bankruptcy can help you. You may be able to wipe out all of your debt and reestablish good credit far sooner by filing than if you continue to struggle with your debt load.

Call us today at (912) 351-9000 or contact us to schedule a free consultation.

The Law Office of Barbara B. Braziel has over 35-years of bankruptcy experience. We are the premier bankruptcy law firm in Savannah, GA and we practice exclusively in bankruptcy law. We invite you to get to know us here and read about the clients we’ve helped here.


We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code. Find out more about Bankruptcy in our guide: All About Bankruptcy.

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