The Truth About Bankruptcy and Credit:
The decision to file for bankruptcy protection isn’t an easy one. When you make the choice and hire an experienced Texas bankruptcy lawyer to guide you through the process, you have taken the first several steps toward getting back on the road to good financial health.
If you file for Chapter 7 bankruptcy, when the process is complete you can borrow money from any lender that will extend you credit.
In many cases Chapter 7 debtors find it easier to get approved for a loan after filing bankruptcy than it was before filing.
This is often difficult for debtors to understand, but it actually makes perfect sense when you understand how creditors make lending decisions and the effects of a Chapter 7 discharge.
A Chapter 7 discharge normally means that the debtor is no longer burdened by unsecured debts, which means the debtor is in much better position financially after discharge.
Since a debtor may only file for Chapter 7 once every eight years, a debtor emerging from Chapter 7 is also a far better credit risk than a debtor with substantial unsecured debts who might file Chapter 7 at any time.
If a debtor is currently in default on one or more debts, a bankruptcy discharge of those obligations means that in a short time the debtor’s credit score will improve dramatically.
Since a Chapter 13 bankruptcy takes five years to discharge, you will not be allowed to take out new loans during your Chapter 13 without the permission of the bankruptcy court.
If you can make it clear why the loan is necessary and you have been following the Chapter 13 payment plan, a judge will usually approve your loan request.
You should seek advice of competent bankruptcy counsel before deciding whether to file for bankruptcy. If you would like to schedule a free consultation, contact the Law Office of Howard Tagg at (903) 581-9961 for more information or fill out the form below.