What does bankruptcy do to a person's credit rating and reputation?

Many people believe that filing bankruptcy is the death nail to a person’s credit rating as well as their reputation. Chances are it won’t have any effect on either.

Typically, when people come to my office to discuss the possibility of filing bankruptcy their credit rating has already taken a big hit well before they meet with me. In fact, the vast majority of people that are contemplating filing either a chapter 7 or 13 have been struggling to pay their creditors for a long time. When a person defaults on payments or is even late with a payment, creditors make negative reports to the credit bureaus. These negative reports will lower an otherwise good credit rating very quickly.    

People are often concerned about the stigma that bankruptcy carries with it.  Even though a bankruptcy filing becomes public record, the average person will never know when someone files bankruptcy.  Consumer bankruptcies are not published in newspapers or other forms of news media. Also, given the state of the nation’s economy over the last five years, bankruptcy filings have been at an all time high. Consequently, with the number of people struggling to make ends meet, someone filing for bankruptcy protection just doesn’t carry the stigma that it might have years ago.   

If you’re contemplating filing bankruptcy but faced with the dilemma of what effect it might have on your credit rating and reputation, please call the law firm of Bouloukos, Oglesby and Mitchell, and let’s go over these and any other questions or concerns you may have.