A previous post suggested that, sometimes, businesses and individuals who are offering alternatives to bankruptcy often scare Louisville, Kentucky, residents with stories about how bankruptcy will ruin their credit and leave them in a very difficult situation that, in the long term, may be worse than their present financial troubles.

To be candid, bankruptcy does significantly affect one’s credit score, and it can do so for a long time. It can mean, for instance, that a person who looked like a good credit risk before a bankruptcy will seem marginal at best right after filing.

However, this does not mean that one’s credit is ruined. There are options for people who are working to make better financial decisions after filing for bankruptcy. For instance, several credit card companies and other lenders are willing to offer secured loans or other alternatives to people who are recovering from the aftermath of a bankruptcy. By keeping their levels of debt reasonable and paying on time, debtors can rebuild their credit.

Another important thing to remember is that, by filing a Chapter 13 bankruptcy, a debtor can get the bankruptcy cleared from his or her credit report in 7 years as opposed to 10. Once the report get cleared of bankruptcy and related blemishes, a person’s former financial troubles should not continue to follow them around.

A bankruptcy does affect one’s credit, but there are ways for a family to get beyond this. Moreover, over time, a family’s credit will often resolve itself such that after about five years, one’s credit score may hardly be affected.