How Bankruptcy Can Improve Your Credit

Contrary to popular belief, bankruptcy can have a positive impact on most people’s credit scores. To begin, let me provide you with a Three Year Credit Score Comparison Chart:

Month1 Month6 Month12 Month24 Month36
Debt Negotiation: good bad terrible terrible so so / good
Debt Consolidation: good bad bad bad so so
Bankruptcy: terrible so so decent good excellent
Doing Nothing: good so so terrible terrible terrible
Repaying on and off: so so so so so so so so so so

You can see that after filing for bankruptcy, your credit will realistically improve far faster than if you try to maintain debt service payments and miss some. Keep in mind that the comparison here is your current credit score compared to your post-bankruptcy credit score.