Actually, bankruptcy does not reduce your credit score as much as being 90 days late on a payment does. Realistically, if you are deep in debt and struggling to pay, your income to debt ratio is probably so bad that no-one would extend you credit anyway. And if you already have a house and a car you probably don’t need big credit in the foreseeable future. Your focus should be on getting rid of this debt so that you can move on with your life and begin to build equity and save, rather than continue to pay on exorbitant credit card interest rates and risk losing your home and vehicles. Moreover, after you receive a bankruptcy discharge, your ability to obtain credit will improve because you no longer have all that debt and creditors know you cannot get another bankruptcy discharge for another 8 years. In addition, there are things you can do to rebuild your credit.

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