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How long does it take to recover from bankruptcy?

Filing for bankruptcy is an effective way to discharge or repay unmanageable debts. However, too many people assume bankruptcy is not a good option because of the adverse effect it has on credit.

Understand, though, that you can recover from bankruptcy, and you may be able to do so more quickly than you expect.

You can expect a Chapter 7 bankruptcy to stay on your credit report for 10 years. However, you don't have to (and you shouldn't) wait to start the recovery process. 

As this article from HGTV notes, the first year after bankruptcy is the most crucial. It is when your decisions will have the most significant impact on your credit history. During this time, you should be diligent about paying any remaining debts on time. If you take out a new loan or credit card, be cautious about the type you open.

As time goes by, individual financial details will have less and less impact on your credit history, but it is important to continue with good habits every year after filing to help you recover. 

For instance, throughout the recovery process, you should be sure to check your credit report annually to keep tabs on your situation and tackle any errors quickly.

While creditors will be able to see a bankruptcy filing for 10 years, you can counter the impact that might have by having a solid track record of healthy finances in the years following the bankruptcy. 

With all this in mind, you should not assume that filing for bankruptcy is going to destroy your financial life forever. There are ways to recover, and people do it all the time. Though, it will take time and hard work, so you should carefully assess all your debt relief options before you make any decisions. Don't feel like you must go through this alone, either. You can consult an attorney who can advise you on your options and help you pursue the option that allows you to pursue a better financial future.

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