If you are carrying debt, you also have a FICO score. A FICO score predicts how you will pay your debts agreed upon. If you file bankruptcy your score will drop. If you already have a low credit score, your dropping FICO score won’t hurt you that badly. This could potentially make it easier for you to improve your FICO score.
You will get rid of delinquent accounts, late payments; high credit balances where a bankruptcy discharges debts can serve the greatest good. These debts will be wiped clean and will no longer show up on your report. They will typically show up as discharged and in many cases boost your credit score.
By wiping your debt history clean bankruptcy gives you the opportunity to start over and gives you a second chance to get your finances right. If you budget properly and are disciplined with your money, you can lay the foundation for building good credit. By not being burdened with outstanding debt that is discharged in bankruptcy you should have disposable income to pay your bills on time. If you establish a good track record of paying your new, post bankruptcy debts, you can increase your credit score over time. This can happen as early as 6 months to a year after bankruptcy.