Hanna Most individuals with debt and credit problems think of bankruptcy as a last resort, and something that will irreparably destroy their credit. While that might have been a fair assessment some years ago, that is not the case today.
Many individuals now see bankruptcy as the first step in rebuilding their credit.
This article explains why. The reporting of credit in the United States is governed by the Fair Credit Reporting Act. It limits the reporting of most adverse credit to a period of seven years from the time the debt is sent to collection or charged off. For people who are behind on their credit cards and other installment payments this usually means spending years to payoff credit card debts or bring the debts current followed by seven years of poor credit ratings. For many people in this situation credit problems can last a decade or more.