I often hear some version of this incorrect idea, so let's take a quick look and see what the reality is about having credit after filing bankruptcy.

• If your credit is already bad because you're behind on payments, filing bankruptcy probably won't make it worse. In fact, those "bad marks" against you are removed from your credit reports and replaced by a notation of your bankruptcy, the importance of which gets smaller as time goes by.

• Once you get your discharge of debts in your bankruptcy, you can immediately start to rebuild your credit.

• Here's an article reporting that a few days after a client received her discharge of debts in her Chapter 7 bankruptcy, she bought a new car to replace the expensive one she was in the process of giving back to the lender. In addition, she qualified for a 2.9% loan from the manufacturer's loan program.

• Here are two more articles if you want more details or more convincing. Article 1 Article 2

The bottom line is, do what's best for your financial situation and don't worry much about your future credit. Failing to take action because of worrying about your credit score only delays your financial recovery.

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