Filing for bankruptcy can help you start with a clean slate. It is a good way to bring your financial life in order while rebuilding your credit.
But building your credit with a bankruptcy filing in your credit report can also be a very lengthy process.

Although you can start restoring your credit rating immediately after having filed for bankruptcy by paying your bills on time and using your credit responsibly, bankruptcy filing can stay in your report for up to ten years, making it a slow process to achieve high digits for your three digit credit rating again. A low credit rating will prevent you from getting favorable interest rates for credit cards, auto loans or a mortgage if you qualify for a loan at all. Higher interest rates in turn may overextend your ability to pay and therefore put you at a higher risk for bankruptcy filing.

Entering this vicious cycle can easily be avoided by using the bankruptcy filing to straighten out your finances and spend within your means to avoid subsequent bankruptcy filings. Making a budget and learning to live with it will prevent you from defaulting on your debt, allowing you to build your credit rating for a sound financial future.