A lot of people ask if bankruptcy will fix my credit (that’s my favorite question). Bankruptcy doesn’t fix your credit per se, but it does give you that fresh start because it stops collections. I used to call it the “18 Again Effect.” Your credit starts back where it is when you file bankruptcy (like you’re 18 again), but you are able to rebuild it going forward.
So the creditors that you owed before can’t continue to report that negative collection on there anymore. So it starts from where that zero point again. They can’t continue to try to collect from you. You don’t owe them anymore, so you can start to borrow money and repay it without having to worry about all of the old stuff continuing on your credit report. So that’s how it gives you that fresh start that you can “begin again from 18.”
We also enroll all of our Chapter 7 clients in a program called Seven Steps To A 700 Credit Score that helps you to figure out how to get back to that better credit and go forward from there.