If you have always been the type of person to pay off bills quickly, you value the credit rating you have built. But sudden surprises like medical debt, job loss or home repairs can leave you owing more than you can pay. As you start to default on your bills, you begin to consider the relief of bankruptcy. But what happens to your credit score?

When you struggle to pay off your high debts, you may worry about how to save your credit score. While late payments don’t do you any favors, you fear that using bankruptcy will destroy your rating. But how much of a blow will your credit take if you decide to seek relief?

The drop depends on your current situation

As soon as your bankruptcy appears on your credit report, your rating can drop significantly. If you had a higher rating, you might see the score go down by around 130 to 200 points. But if high debts had already pushed you low, you may not see much of a difference. The immediate effect of bankruptcy will leave you with a low credit rating.

The record won’t last forever

However, even though bankruptcy may lower your credit score, the impact fades over time. Chapter 7 filings stay on your report for ten years. But many of your negative accounts discharged during proceedings fall off after seven years of inactivity. And you can use that time to rebuild your finances with credit-building tools like secured credit cards.

Chapter 13 will only stay on your report for seven years and may reflect more favorably to potential lenders. Since you will repay most of your debt in a three-to-five-year plan, you won’t have to wait as long for the record to drop off.

Bankruptcy may open the door to rebuilding your score

You don’t want to take a hit to your credit score. But when your bills start piling up, and you can only pay late or not at all, each account will begin to reflect poorly on your rating. If you can’t see a way out of your debts, you may end up hurting your score no matter what you do.

Seeking relief through debt settlement or bankruptcy may be the option that puts you back on track to rebuild your finances.