Many consumers who are struggling with debt in Oregon believe that filing for bankruptcy would make their problems even worse. This is not necessarily true for those with a lot of unsecured debt since many people who file for bankruptcy find that their credit scores begin to go back up quickly after bankruptcy.

A study by LendingTree found that 43 percent of debtors who filed for bankruptcy had a credit score of 640 or greater within a year after filing for bankruptcy. Within two years, 65 percent of debtors had a credit score above 640.

Three years after filing for bankruptcy, consumers who applied for a mortgage were offered APR rates that were 19 points higher on average than applicants who had not filed for bankruptcy. Those with credit scores of at least 720 three years after bankruptcy were offered similar interest rates compared to applicants who had never filed for bankruptcy.

The key to bouncing back after a bankruptcy is to avoid the same habits that led to needing to file bankruptcy in the first place. Consumers should make sure all bills are paid on time and pay extra on loans when possible. An emergency fund can keep many people from having to rely on credit cards for unexpected expenses.

Debtors who face overwhelming debt may be able to get a financial fresh start by filing a Chapter 7 bankruptcy. A Chapter 7 bankruptcy allows a debtor to discharge many types of debt, including credit card bills and student loans. Filing for bankruptcy should also stop wage garnishments, repossessions and creditor calls.

An attorney may be able to help debtors file for bankruptcy by preparing petition paperwork, filing for property exemptions and attending the Chapter 7 meeting with creditors. Many debtors will be able to keep most of their property when they file for a Chapter 7 bankruptcy under state or federal property exemptions.