One common misconception is that the person’s credit score would never recover, whereas the truth is that if someone were in a position in which they were considering bankruptcy, then their credit score would probably not be all that great anyway. Rather than having a negative impact on their credit score, filing for a bankruptcy could actually have a positive impact, because the person could start the process of rehabilitating and eliminating some of the negative marks on their credit.
Will Someone Be Able To Get Credit After Filing For Bankruptcy?
The other misconception people have is that they will never be able to get credit again once they have filed for bankruptcy. There are limitations on how often someone could receive a bankruptcy discharge, which is something that credit card companies are aware of. Credit card companies don’t worry about extending credit to someone who had already filed for bankruptcy because they know that person would not be able to file for bankruptcy again within a certain period of time, so the credit card holder would be locked in.
Credit card companies also know that people with good credit have a lot more options so they could afford to be more selective regarding which credit card they apply for and which credit card they use. People who have gone through the bankruptcy process are still able to get credit cards, although these credit cards oftentimes have a higher interest rate. In short, a person won’t be denied credit simply on the basis that they’ve through the bankruptcy process. In fact, many clients have informed us that they had already started receiving credit card offers in the mail even before we completed the bankruptcy. For many people, bankruptcy can be an improvement to their credit rather than a death sentence.
Will Friends, Family Or Work Find Out About A Bankruptcy?
The filing of a bankruptcy is public information, so there is a possibility that friends and family find out about it. But, that would only happen if they were actively trying to find out that information. Most people won’t take the time to search for bankruptcy cases filed by someone, so it would be unlikely that people find out about a bankruptcy that is filed without being told.
Would There Be Any Repercussions of a Bankruptcy on Someone’s Job?
The person’s employer would be able to find out if they ran a credit report or to search public Court records on the person. But, this would usually be performed at the screening stage when they are trying to decide whether or not to hire the person, rather than having an effect after the fact when the person has the job.
Has Anyone Been Fired Because They Filed Bankruptcy?
No, and in fact, under the bankruptcy code, the person could not be discriminated against solely on the basis of them having filed for bankruptcy.
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