Filing for bankruptcy will have an impact on a person's credit score. However, there are scenarios in which a person in Texas will see his or her score increase after doing so. This is because most debts that were previously on a credit report will have been discharged. In some cases, credit card companies and other lenders may seek out a consumer who has just filed for bankruptcy. However, there is no guarantee that credit will be available immediately after doing so. It is also likely that a lender will charge a higher interest rate.
A person who filed for bankruptcy may be able to rebuild his or her credit in as little as two years. This is in spite of the fact that a Chapter 13 bankruptcy stays on a credit report for seven years. A Chapter 7 bankruptcy will stay on a credit report for up to 10 years.
Therefore, individuals who are responsible with their money after having debts discharged may not suffer permanent negative credit consequences. Generally speaking, a person who filed for bankruptcy nine years ago will have an easier time getting credit than someone who filed a year ago. This is because lenders have a better idea of whether that individual is likely to repay a debt.
There is no way to know ahead of time how a bankruptcy could impact a person's credit score after he or she files. However, there may be many benefits of doing so that are available to almost everyone. For instance, those who file may receive a stay against future creditor contact. They may also be able to keep assets such as a home or a car. An attorney may provide more advice about how a bankruptcy might influence an individual's financial situation.