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How Bankruptcy Affects Your Future

Filing for bankruptcy is a scary thought for many people. Not only have you been struggling financially, but now you might make a big decision that has other potential consequences. However, it has potential benefits, too. Learn what happens after you file for bankruptcy so that you’re prepared for the changes it will make in your life.

Assets and Property

Whether or not you get to keep your assets and property depends on whether you file a Chapter 7 or Chapter 13.

With Chapter 7, you’ll usually have to sell off many of your assets to pay down a portion of your debt. However, some of your assets, including your car and retirement accounts, are exempt from this.

Chapter 13 keeps all your assets in your possession. Instead, your bankruptcy attorney will help you reorganize all your debt (including credit cards, mortgages, and personal loans) so that you can pay off a portion over the next few years. As long as you make the payments, you can keep your assets.

Credit Score

It’s no secret that filing for bankruptcy brings down your credit score. A Chapter 7 filing stays on your report for about 10 years, while Chapter 13 stays for up to seven years. Usually, Chapter 13 brings your credit score down less since you’re paying down some of your debt.

After your bankruptcy has gone through the entire process, applying for future credit cards or lines of credit can be difficult. However, some specific reputable lenders are known for giving bankruptcy filers a second chance. Plus, when you add new information to your credit history (which can come from simple things such as renting, phone bills, or utilities), these are given more weight than old information.

The good news is that watching your credit score develop is easy! Everyone can access their credit score report once a year for free from the three major credit bureaus. Many banks also offer a picture of your credit score along with their online banking program. (Credit unions usually offer financial literacy programs that you can make use of while you’re getting things back on track, so make sure to ask!)

Public Records

Bankruptcies are part of public records, but that hardly means that everyone will know that you filed. If an attorney or a creditor wants to know this about you, they can look it up under the PACER (Public Access to Court Electronic Records) files. Other people such as landlords and employers can see this on your credit report, too, so be prepared to show them how you’re turning your financial habits around. However, they won’t see a bankruptcy filing on a general criminal background check, so if that’s all they’re running, you don’t need to bring forth the information.


Filing bankruptcy is a big step. However, it doesn’t have to be one that you’re making without any knowledge about how it will affect your future. Choosing a top-notch, compassionate bankruptcy firmsuch as Fair Fee Legal Services can help you make the step toward financial freedom with confidence.

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The professionalism and competence displayed by Lori Draper in dealing with me and my wife is rare in this day and time, where businesses treat clients as commodities rather than people. Lori has exceptional people skills and works diligently to make clients fell that they are the most important thing her agenda. Lori is prompt, timely and professional, which creates an atmosphere of trust and makes clients want to recommend the Fair Fee Legal Services to others. Employees like Lori Draper is an asset a company should be proud of representing them

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Harlene July 2010 – I had put off filling for a while. I was kind of afraid of the unfamilar. The staff was amazing, and made me feel good about what I needed to do. Seth, was right to the point and got things handled. I am very pleased.

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