There is a major difference between Debt Resolution and Bankruptcy. The information discussed in this article is based on general facts and knowledge and should not be considered legal advice. You are encouraged to speak with a Bankruptcy Attorney to educate yourself about the various options available to you.
Chapter 7 Bankruptcy remains on your credit report as a public record for a minimum of 10 years. Derogatory credit (late payments and charged-off accounts) may remain on your credit file for 7 years and there are no public records on your credit file. Both situations will however, severely affect credit.
Bankruptcy reporting on your credit file may also affect other areas of your life. As stated earlier, Bankruptcy is a PUBLIC RECORD. Because of that fact, filings can be found at the county registry. Also, many counties report bankruptcies in the newspaper or some other print format. There is also a publication that most lenders subscribe to that provides them all the recent filings. It's important to understand that a bankruptcy is not easy to hide from.
Most employers pull credit files on potential candidates. It is likely that a candidate without bankruptcy will have a better chance at the position. Additionally, some employers will not hire an individual with a bankruptcy on their credit file. However, the negative impact that a settling your debts will have may also effect employment. Some positions will absolutely exclude a candidate with a bankruptcy on their record. This is especially true for security jobs, high level management jobs, employment at banks and financial institutions and many other types of positions.
Bankruptcy can also cause issues with renting. Many landlords will not rent to individuals with a bankruptcy on file. While landlords cannot discriminate, they may legally not rent to someone based on their credit profile.
Bankruptcy can also exclude you from loans in the future. While it’s true that some creditors will grant credit after a person files bankruptcy, (although there is typically a waiting period) some creditors will not grant a loan to anyone with a bankruptcy on their credit file. Most loan applications ask if you have filed bankruptcy in the past 10 years, and some actually ask if you have ever filed for bankruptcy.
The bankruptcy law of 2005 has made if more difficult for many people to file a Chapter 7 Bankruptcy. Many are forced to file a Chapter 13 bankruptcy. Chapter 13 is a form or reorganizing your debts. In most cases a debtor will be required to pay back a portion of their unsecured debt, much like a settlement program. It's a good idea to consult with a bankruptcy attorney prior to deciding to settle your debts in order to explore all your options and make an educated decision.
No matter how you cut it, bankruptcy can affect many areas of your life and should be avoided at all cost. It should be your last resort after you've carefully considered all of your options. For more information about bankruptcy, speak with a bankruptcy attorney in your area.