Credit Bureau of Borger and
the Amarillo Area
Bankruptcy
Bankruptcy may be an option, but only as a last resort.
Make sure you understand both the short-term and long-term consequences of what you are about to do.
Contrary to popular belief, bankruptcy is not an easy way out.
Just because you file bankruptcy does not mean it will be granted. A judge decides if your situation warrants bankruptcy.
The act of filing your bankruptcy with the court, even if you later change your mind or the judge does not grant you the bankruptcy -- the bankruptcy will show on your credit record.
The two most common types of bankruptcy filings for consumers are Chapter 7 and Chapter 13.
Chapter 13 bankruptcy requires the liquidation of assets. Chapter 13 bankruptcy allows for debt restructuring. Usually, creditors work with you to set up a new repayment plan lasting from three to five years. So, even though the bankruptcy appears on your credit report, the fact that you repaid your bills also appears.
Not all debts included in bankruptcy.
Even if you choose to liquidate or restructure, a bankruptcy is not a complete solution to your financial problems. Some debts cannot be included in bankruptcy filings. These typically include alimony and child support, student loans guaranteed by the government, judgments for punitive damages, and local and federal taxes secured by liens.
Bankruptcy remains on credit record up to 10 years!
If your situation absolutely demands that you declare bankruptcy, be prepared for what the future holds. Yes, many of your debts may be "erased," but you will not walk away with a clean slate.
In accordance wit the federal Fair Credit Reporting Act, a bankruptcy -- whether it was filed, dismissed or discharged -- may remain on your credit report for up to 10 years. (Chapter 7 remains 10 years; Chapter 13 remains 7 years.)
During that time, you will likely find it very difficult to obtain a new mortgage, personal loan or credit card. If you do find a lender willing to give you another chance, you will likely receive less credit than you expect -- and pay higher interest rates for it.