Bankruptcy is by far the best option to get out of financial crisis as the bankruptcy laws protect the individuals from getting any more threats from the creditors.Inspite of this they are extremely concerned about their credit ratings. People struggle and try to stay as current as possible. It nearly takes a decade to build up a good credit score.
Although the creditors are willing to work with the debtors, they probably will destroy the credit score, by showing multiple late payments. Filing for bankruptcy actually improves the credit score because the balances on the outstanding debts are wiped out or discharged.
Bankruptcy stays on the file for nearly 10 years, so it is very difficult to obtain credit from any bank or creditors and even though he gets a credit, the interest level is very high.
Lenders look at the way you have paid your bills in the past as an indication of how you will pay your bills in the future. A bankruptcy is an adverse rating in this respect, but creditors can also see how your credit was before the circumstances which caused the bankruptcy. If you had a good credit history and paid your bills on time before the bankruptcy, you may find that it is easier to re-establish credit than if you were perpetually behind on your payments and had judgments against you.
Many people go to the bankruptcy lawyers to get an idea of how bankruptcy laws work. They are well aware that once bankruptcy is filed there will be no threatening calls from the creditors, which is an added advantage, but they are equally concerned about their credit report and try their best to keep their credit reports up to date.