Sudden loss of assets to bankruptcy can be quite painful. However, declaring bankruptcy may be necessary due to various factors, such as sudden illness and medical bills associated with illness or sudden termination of employment, an ugly divorce or uncontrollable credit card debt. Foreclosure and bankruptcy are the two financial disasters that most every Texan wants to avoid during the course of the person’s life.
If bankruptcy is declared, it takes nearly a decade to be removed from a credit report, once it’s finalized. The decision to file for bankruptcy can help a desperate debtor handle crushing debt but filing will also crush any efforts to obtain new forms of credit, such as loans or credit cards. A Chapter 13 bankruptcy will stay on a person’s credit report for seven years; a Chapter 7 remains for 10 years.
After the waiting period has ended, if the bankruptcy still remains on a credit history, the debtor can request, in writing to the credit rating companies, for the bankruptcy report to be removed. A constant check of credit reports is also advised for error-free statements. It might be possible to be approved for a loan during bankruptcy but interest rates will be much higher. A debtor should wait at least two years after filing before applying for a loan.
Filing for bankruptcy is not an easy decision to make but it may help people overcome financial challenges. People should make sure they understand all their options when they are in need of debt relief.
Source: IVN.us, “How Long Will a Bankruptcy or Foreclosure Stay on My Credit Report?” Simon Campbell, May 1, 2014