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.
People should first educate themselves about bankruptcy. For example, they may be eligible to file either a Chapter 7 or a Chapter 13 bankruptcy. The former allows them to discharge most nsecured debts. With the latter, they will work out a payment plan for three or five years. It may be better to act sooner rather than later since failing to address the issue can result in more debt.
Identity theft protection or credit monitoring services may help a person keep an eye on accounts after filing. It might also be worthwhile to dispute negative accounts from bankruptcy on credit reports. Around one-third to one-half of these may be removed simply because someone disputes them. A person can then work to rebuild credit by getting a small loan and paying it off or working with a bank program that helps people improve their credit.
People who are struggling with financial obligations may want to talk to an attorney about their options. Some debts, such as taxes and student loans, usually cannot be discharged in bankruptcy. However, if a person has other debts besides these, it may be possible to declare bankruptcy and free up money to pay off debts that cannot be discharged.