Generally, a bankruptcy stay on one’s credit report for ten years. It is the simple method of determining creditworthiness and even affects potential employment when filing a simple chapter 7 bankruptcy. When you file Chapter 13 bankruptcy, agreeing to pay certain amounts to cancel the debt for a set period, bankruptcy usually stays on one’s credit report for seven years.
It has become increasingly popular to screen potential employees by looking at their accounts. This is especially true when the employee can be handling large sums of money, but it can also apply to other types of jobs. Although it may not be fair, bankruptcy does not tend to adversely follow too long.
It doesn’t mean you can’t get a job, buy a home, rent an apartment, or even get a credit card within a few years of bankruptcy. But economic experts warn those who are recently bankrupt to be very careful about obtaining or using any new credit card. In fact, cash often pays an excellent way to go for a few years after a bankruptcy.
Firstly, if a new credit card is offered to one
It is likely to be offered with very high interest rates and high annual fees. It may not be worth these fees to get credit. In fact, people who get credit cards at a bankruptcy are very high risk and they are more likely to miss out on payments or have trouble paying new loans. Lost payments can further damage one’s credit even more than a bankruptcy. They find that economic behavior has not been corrected.
The person who has gone bankrupt and then incurred additional debts is most likely to face challenges in finding work, renting a home, or buying a car on credit. This is because the person continues to establish a dubious financial record. It is important that any new debt should be taken up only with a big thought, and only when you have the ability to repay debt.
Bankruptcy can occur for many reasons
They are certainly not all mistakes of the person who borrowed money in the first place. Unemployment, sudden severe illness in the family or one’s personal illness can all make repayment of debt very challenging. When one has been able to recover financially from these setbacks, it may be helpful to inform people judging one after a bankruptcy, why the bankruptcy occurred. For example, most employers can relate to a person’s struggle to find work in a difficult job market, or the need to take care of a sick spouse.
Being open about bankruptcy and why it has happened can also score some points with people who are analyzing your ability to be a good tenant. It can help get letters from previous landlords detailing a good payment plan on previous rentals. Some people are faithful to their rent, but had difficulty meeting other debts.
However, for some creditors, bankruptcy may have taken place for viable reasons, but it is still treated as a huge field against a credit. Nor is it something for them when or why bankruptcy occurred. It may have happened five or six years ago and still be a factor. Legally it can be considered until ten years after the bankruptcy occurred.