Although bankruptcy filings are down across the country, Texas consumers may find themselves overwhelmed by debt because of a job loss, medical issues or mounting credit card bills. They might be worried about how filing for bankruptcy will affect their credit. However, it is possible to start rebuilding credit, and some people may see their credit score improve as soon as they file.
For people in Texas struggling with the burden of overwhelming debt, bankruptcy can be a real solution to help create a way out of a difficult situation. However, when considering filing for bankruptcy, it is important for a person to have an accurate and thorough understanding of how this process will affect his or her credit in the near future and the long term. Filing for bankruptcy is a serious action that can enable people to pay off their debts and get some relief, but it can also cause their credit scores to drop by 200 points.
People face financial strains for various reasons. In some cases, a Chapter 7 or Chapter 13 bankruptcy can help to provide relief and to get debtors on the track to financial stability.
Some people in Texas may be carrying a significant amount of credit card debt. By the end of 2017, Americans collectively added the most debt to their credit cards since before the recession of 2007. In all, total credit card debt is more than $1 trillion.
Many Texans struggle under the weight of their student debt. Unfortunately, however, these obligations are very difficult to discharge in bankruptcy. A large part of the reason is because Congress has passed several laws beginning in the 1970s forbidding the discharge of these types of loans in most cases.