If you’re in debt, you know how intimidating the thought of paying back your creditors (with interest) for years can be. Whether you have considered filing for bankruptcy or you have been financially advised to do so, it is best to thoroughly research your options and the effect your actions will have on your credit score and subsequently, your future. While bankruptcy can give you a clean slate by wiping many of your debts out, it is likely that your credit will be affected for a period of time depending on what type of debt situation is being excused.

The first thing you should consider when thinking about filing for bankruptcy is whether it will help your particular situation in the long run. Although it may seem like an attractive option, in some situations, it may be more harmful than helpful. With this in mind, it is best to explore other avenues before solidly committing to filing for bankruptcy.

A few preliminary strategies that you may find beneficial include financial counseling or speaking personally with your creditors. It is in your creditors interest to be paid the money they are due, therefore in order to protect the reputation of the business, many will elect to work with you on a repayment plan rather than send your file to collections.

Scheduling an in person meeting with the accountants of your major creditors may yield unexpected results. In some cases this strategy may not pan out, however, it is likely worth the effort if you can work out a payment plan. Additionally, loan counselors may be able to assist you in further exploration of your options before filing for bankruptcy, help you devise reasonable repayment plans, or if necessary, determine that it is a good time to file for bankruptcy.

One of the reasons that you go through the process of this preparatory consideration is because (depending on where you live and the extend of your debt) bankruptcy may be evident on your credit report for approximately 10 years and in some situations, it does not excuse every debt.  Ultimately, this makes it much more difficult for you to establish your credit and you may not be able to take out a loan, since your credit rating will be heavily effected by this action.

In some cases, however, declaring bankruptcy may improve your credit score. This is especially true for those who are so deeply in debt that they have a negative credit score to begin with. If you are able to wipe the slate clean and take some time to devise a plan on how to maintain positive cash flow without overdrawing your reserves, you may be able to make a fresh start and establish good credit after bankruptcy.

Filing for bankruptcy will effect your credit, one way or the other, and the consequences should be seriously considered, however, there is life after filing for bankruptcy. If you feel you can establish a better reputation after filing for bankruptcy, it may be a good option for you, however, all of your financial decisions must be grounded in reality. It is totally possible to raise your credit score, but you will need to decide whether the best way to do that is by making steady payments to your creditors or trying to re-establish yourself with bankruptcy as part of your credit profile.

Emma Martin writes for BluWiki where you can find Old Country Buffet Coupons and Depend Coupons.