William H. Lively, Jr

Study: Bankruptcy unlikely to affect employment

When people in Texas are dealing with insurmountable debt, collection calls or lawsuit threats, they may not be sure which step to take. Bankruptcy may provide debt relief, but many people are worried about filing because they are concerned about potential other effects on their lives. Bankruptcy does have a serious impact on a person's credit report. However, many people are worried more about the potential for effects on other areas, especially their ability to find and get a job. They may know that some employers, insurance companies and others review credit reports when making decisions.

According to one study, a bankruptcy flag on a credit report may have little effect on people's ability to find and keep a job. Researchers examined two groups of people who had filed for bankruptcy, some who had filed for Chapter 7 and some who had filed for Chapter 13. A Chapter 7 bankruptcy liquidates a person's assets and provides relief for their eligible debts, and it remains on their credit report for 10 years. On the other hand, Chapter 13 bankruptcy allows people to keep their assets but mandates a payment plan. It can fall off of a credit report after seven years.

During the three-year gap when bankruptcy flags were removed from the credit reports of Chapter 13 filers but stayed in place for Chapter 7 filers, researchers found that both groups enjoyed roughly equal rates of employment. There did not appear to be any negative consequences across the board for people with Chapter 7 bankruptcy flags, although they were less likely to have mortgages and high-limit credit cards.

Bankruptcy may offer a path to escape debt for many struggling with credit cards, auto loans or medical bills. An attorney may help to navigate the process of filing for Chapter 7 bankruptcy and seeking a new financial future.

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William H. Lively, Jr


William H. Lively, Jr
432 S Bonner
Tyler, TX 75702

Phone: 903-920-0008
Phone: 903-593-3001
Fax: 903-595-3715
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