Month: December 2010

The Devastating Effects of Bankruptcy

In 2010, more than 1.5 million Americans filed for bankruptcy. Unfortunately, many bankruptcy attorneys do not adequately explain the effects of bankruptcy to their clients. Put simply, the total financial and emotional costs of filing bankruptcy can almost never be truly quantified. Even the credit score impact alone can be devastating. For example, when you file for bankruptcy, every credit account you decide to include within that bankruptcy will become listed on your credit reports as an “included in bankruptcy” account. Usually, the more of those that appear, the worse your credit score. Additionally, the bankruptcy filing and bankruptcy discharge listings themselves (separate from the “included in bankruptcy” listings) will also appear in the court records section of your credit report. Because so many negative items are attached to one single bankruptcy proceeding, removing all traces of that bankruptcy filing may seem daunting. For that reason, and if at all possible, you should avoid bankruptcy.

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