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Christopher Todd Morrison, P.C.
Affordable Bankruptcy
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How bankruptcy affects a credit rating

Texas consumers who are considering filing for bankruptcy might wonder how long it will remain on their credit record. A Chapter 7 bankruptcy remains on a person's credit report for ten years while a Chapter 13 bankruptcy stays on the credit report for seven years.

More than half a million people file for bankruptcy annually, mostly because of medical debt. Unfortunately, bankruptcy is not always easy and could have consequences. People might struggle to rent a place, buy a home or get a loan after a bankruptcy. Tax debts, student loans, and debts related to child or spousal support generally cannot be discharged in a bankruptcy. With a Chapter 13 bankruptcy, a person even continues paying back creditors although it is on a manageable schedule. In a Chapter 7 bankruptcy, a person may keep some assets while others are liquidated to pay creditors.

A person can begin rebuilding credit after declaring bankruptcy. The first step is to begin paying bills on time. It may not be possible to get a regular credit card after filing for bankruptcy, but a person may be able to get a secured credit card. Establishing an emergency saving account can also help a person deal with some unexpected expenses.

Unfortunately, emergency savings are often insufficient to deal with many of the financial blows that lead a person to consider bankruptcy such as illness, divorce or job loss. People who find themselves in a situation like this might want to talk to an attorney about filing for bankruptcy. One advantage of a bankruptcy filing is that it immediately puts a stop to any creditor actions. This means that if lawsuits have been filed because of unpaid debt, those actions come to at least a temporary stop.

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