Lefkovitz & Lefkovitz
Nashville Office 615-686-2279 Cookeville Office 931-400-2218
Serving all of Middle Tennessee's Bankruptcy Needs

Won't bankruptcy destroy my credit?!

For many consumers, a good credit score seems life-or-death important, although they're not exactly sure why. Some people will endure incredible financial distress to keep their credit score up, even though they know there's no logical way to keep making all their debt payments.

If you already know that bankruptcy may be your only way out of excessive debt, it is important to talk to a professional about your options -- an attorney, not a debt consolidation company or someone offering you yet another balance transfer. Perhaps you're resisting the solution because you're afraid of your credit being trashed.

Causes of debt and the meaning of your credit score

Nobody wakes up one day and decides to get into heavy debt. In many cases, an income loss, a divorce, a medical event or another serious, uncontrollable problem leads to a severe financial struggle. In some situations, bankruptcy would bring tremendous relief, but the struggling individual resists because they are ashamed and frightened about their credit.

In essence, that credit score is a risk-level emblem to potential lenders, representing a consumer's ability to borrow -- to get loans and make purchases. For some people in serious debt, an obsession with maintaining that score causes immense suffering and keeps them from making decisions that will benefit them in the long term. It's ironic, isn't it?

The definition of insanity

That famous definition of insanity tells us that it's crazy to keep doing the same thing, over and over again, and expect a different result. But Americans do this all the time with their problem debts.

Are you making payments to prop up your credit score, throwing thousands or tens of thousands of dollars toward debt that you know you can't afford to pay off, ever? Are you getting yourself deeper into debt to look like you can afford the debt you already have? Are you sacrificing things like healthy food, medical care and family recreation to make credit card or loan payments? If so, you may want to reconsider your strategy.

Oh, wait. What about the answer to the original question about bankruptcy destroying your credit? Of course it will lower your credit scores for some time -- if they're not already low. But if the filing eradicates a lot of your debt -- or restructures the debt so you can afford to service it -- your credit scores will eventually be restored, along with your sanity.

Get the advice you need

Bankruptcy may be right for you if your best efforts aren't working. If you know you need help with your debt, talk to an experienced bankruptcy attorney about your situation. In most cases, the consultation is free and confidential.

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Nashville Office
618 Church Street, Suite 410
Nashville, TN 37219

Phone: 615-686-2279
Fax: 615-255-4516
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Cookeville Office
312 East Broad Street, Suite A
Cookeville, TN 38501

Phone: 931-400-2218
Fax: 931-526-6244
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