No-one plans for failure. Why would you plan for failure, when all your energy is being directed toward success? You, the entrepreneur, knows that if you were to even slightly sway from the mindset of success, you may end up drowning in the oceans of failure.
No army goes into battle to surrender, no football team plays to lose, no entrepreneur goes into business to become insolvent, and no individual works hard for his family to end up bankrupt. But, life happens, things change, the economy fluctuates, a new government, a GFC, an insolvent debtor, a family tragedy, divorce, increase in taxes, unexpected debts, medical expenses and so many of life’s unexpected events could change everything, including your financial situation.
Some people, such as people in the credit card industry, don’t want people to know the truth about bankruptcy (because if your bills are discharged, they won’t get paid!).
The truth: Bankruptcy DOES NOT have to hurt credit scores.
It’s true that a bankruptcy filing will stay on your credit report for up to 10 years (typically 7 years if you file under Chapter 7 bankruptcy), but it doesn’t necessarily mean your credit will be in the dumps during that time.
It will probably be tougher to get loans or low-interest credit cards right after filing bankruptcy, but if you are seeking bankruptcy relief, your credit may not be so great to begin with.
As you keep on top of monthly payments for your rent, mortgage and utility bills, you’ll be strengthening your credit report.
If you do your research you should be able to find a starter credit card that will help you jump start your good credit history again.
This card will probably have a higher interest rate, but the point is to charge items that you normally would have bought with cash and pay it off each month (or at least pay more than the minimum monthly payment).
By using credit wisely, you’ll be proving to the credit reporting agencies that you’re a responsible credit user. If you keep those habits up, you’ll likely see your credit score rise in 1-2 years after filing.
Your credit score probably isn’t the best it could be before you filed bankruptcy, and it will take time to boost it up, but it can be done if you stay dedicated to responsible spending.