There are many elements to a personal budget, and the same holds true for personal debt. While the ultimate goal is to pass off debt, it’s not always that straight forward. Filing for bankruptcy provides a potential solution but it, too, comes with extra questions as the process develops. It’s common for people to worry what bankruptcy will mean for their personal finances, not only as you work through your current difficult situation, but over the long-term as well.

Your credit score

It’s true that bankruptcy damages your credit score. While this is a setback, your score begins to improve soon after filing, provided you’re keeping up with your payments. There is a holding pattern as the bankruptcy filing takes place where your credit will be at its lowest. After reestablishing yourself, often in the six-to-twelve month range, your credit score will stabilize and begin recovery.

Monitoring progress

While paying your bills on time is the primary factor, it’s also important to watch that your credit score is recovering as it should be. Request an annual report from the major credit bureaus annually. If recovery has stalled or if there is unusual activity, a quick response is needed.

A cumulative rating

Life is constantly changing. Whether you are going to school, changing jobs, getting married or divorced, your status is in continual motion. Your credit score is the same. It reflects your past, but what you do today has the strongest impact on tomorrow. An experienced bankruptcy attorney can help you understand the best options for your financial situation, both today and looking toward a debt-free future.