A Bankruptcy Lawyer in Washington State sent me this post. I thought he did a nice job with it, so I am sharing it. His basic point is a simple one. If you are not careful, debt collectors will quickly and completely destroy your credit. This article discusses the importance of protecting your credit and ways to do it when your financial problems are still manageable.
However, the article also makes a second important point. You do not need to be having significant financial difficulty before the debt collectors destroy your credit. “[Y]our first late payment on your credit report might drop you from excellent credit (740 points) to mediocre (640 points).” That is the difference between qualifying for a conventional mortgage and not qualifying for one.
As such, a person falling behind on their bills in general has already destroyed their credit. At that point, Bankruptcy becomes a relatively painless solution to your debt problems. If the debt collectors have already ruined your credit, then Bankruptcy really cannot do any further harm. To the contrary, I have found that it is much easier to rebuild credit out of Bankruptcy, than it is to rebuild credit out of a mess.
Source: WashingtonBankruptcy