Many Texas consumers face seemingly insurmountable debt.. They may have credit card bills with balances that got out of control, or they may have found an unexpected illness saddling them with medical bills. They struggle to pay their bills each month and face creditor calls, late fees and high interest rates. While personal bankruptcy could present a way forward out of this situation, many people are concerned about the effects of bankruptcy on a credit score. Of course, a bankruptcy filing is a serious negative entry on a credit report and will affect a person’s ability to access new credit.
However, in most cases, people who file for bankruptcy already have a bad credit score. They may have late payments, closed accounts or judgments against them due to outstanding debts. In fact, many people wait for longer periods than may be optimal to file for bankruptcy over these concerns, further perpetuating the negative credit entries on their records. In some cases, people may find that their credit scores actually go up even shortly after bankruptcy as their significant debts are removed.
At the same time, people will certainly find high interest rates and denials for credit lines shortly after bankruptcy. Over the years that follow, however, people can rebuild their credit even while the bankruptcy appears on their record. Chapter 7 bankruptcies persist on a credit record for 10 years while Chapter 13 filings remain visible for seven years. Smaller loans, secured credit cards, and similar products can provide mechanisms for people to establish positive payment histories.
People who are struggling with their bills may be desperate for relief. A bankruptcy attorney can provide advice and representation in moving forward to take action to seek a route out of debt and a different financial future.