The fact of the matter is that if you are considering filing for bankruptcy, your credit rating is probably already in jeopardy. You are probably very well aware of the negative effects a poor credit rating can mean for you. Many people think that filing for bankruptcy is a death sentence to their credit rating. Perhaps the first thing to consider is the alternative. Without a filing, the bills that you are defaulting on month after month add up on your credit report. A history of delinquency is clearly not a good thing. With a bankruptcy filing, you stop that aging process. This is a good thing. Think of it as a jumping off point. Paying your bills is always the best solution when it comes to credit, but if that just is not possible, wouldn't it be helpful to just be able to start over? It is more than possible to rebuild credit if you file for bankruptcy.
Bankruptcy does not prevent you from being able to ever borrow again. It is true that in some cases, it may be difficult to open a new loan, but it does not prevent you from being considered. Let's use buying a new car as an example. If you file a Chapter 7 bankruptcy, you can essentially get rid of all of your previous debt. A car dealer then knows that aside from living expenses, you have freed yourself of many other expenses which then means you have freed up extra money that allows you to afford a new car. Dealerships don't want to just turn away business, so they may want to charge you a little extra to get you financing and you may have to put a little more on your down payment, but they know that your money is just as good as anyone else's. With all of that debt cleared away you're essentially a blank slate and such a purchase would only help you start establishing new credit right away.
Bankruptcy does not kill your credit. It allows you to get footing again so that you can rebuild it. Doing nothing is what can kill your credit.
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