People are frequently concerned about the effect a bankruptcy will have on their credit scores.  However, a bankruptcy on a credit report is probably not as bad as most people assume.  It may seem counter-intuitive, but in many situations, a bankruptcy can actually improve a person’s credit.  This is because those in need of bankruptcy probably have bad credit already, which is the reason they are filing to begin with.  If someone has more debt that they can afford to pay, it is going to take a toll on their credit score.  They will have high debt to income ratios, and inevitably will have late payments reflected on their credit reports, which are all detrimental to a person’s credit profile.  A bankruptcy can wipe out all of the bad debt that is causing all of these negative factors to appear on a person’s credit report.  So, while a bankruptcy might not be a great thing to see on a person’s credit, it can be better than the alternative.  Not only that, but the fresh start that a person will have after a bankruptcy can allow someone to start building a positive credit profile a lot faster than if they tried to get themselves out of the debt without a bankruptcy.  A relevant article on this subject was recently written by Jean Chatzky on the NY Daily News titled “There is life after bankruptcy:  Credit could thaw in 18-24 months.”