Insolvent

What effects does bankruptcy have on someone for the rest of their life?

Someone I know is filing for bankruptcy. I was wondering if there were any effects that bankruptcy would have on her as far as credit. Does bankruptcy go on any kind of personal record? I'm just wondering if she'll always have to worry that filing bankruptcy will effect her credit permanently or any other issues throughout her life?

Public Comments

1. It comes off the credit report in ten years. However, sometimes you "may" be asked on an application if you have ever filed for BK. Filing BK will not destroy your credit for life...The initial effects will be bad for about two years...after that...your credit score will start to go up. In terms of catastrophic effects...filing for BK "might" effect you if you are in certain professions..ie accounting/finance...like being a CPA (filing for BK when you are a CPA would not look good)..Same issue with being a certified financial planner or stock broker. If you work for the government and need a Top Secret clearance...filing BK might be an obstacle.....In the vast majority of cases...filing for BK should not be an issue.
2. Well, the first thing to be concerned with is whether any of your property is going to be seized for sale at auction during the liquidation process, but seeing as how most people filing for BK these days own basically nothing, that shouldn't be an issue. And there are the effect to their credit report, but again here, most people filing are in genuine financial distress, and aren't particularly keen on taking on debt ever again, so the actual credit implications shouldn't be much of a concern. However, many employers and landlords check credit reports, so it can be an impediment when finding a job or place to rent. But on the other side of that, there have been a huge surge in bankruptcy filings, and we're only at the tip of the iceberg; chapter 7 and 13 filings have risen to nearly 1 million this year. That's a 28% rise over 2007 and the year ain't even over. Over 5 million families could file next year, and that's a very conservative estimate. It would terrify you to know how many of the households in the USA are insolvent. While that doesn't bode well for the US economy, it does make people who have filed more attractive employees/lessees in relative terms - what, are companies just going to refuse to hire what could be up to 30% of the workforce once the depression is over? I don't think so.
3. Pursuant to 15 U.S.C.A. § 1681(c): Except as authorized under subsection (b) of this section, no consumer reporting agency may make any consumer report containing any of the following items of information: (1) Cases under Title 11 or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years. So, the bankruptcy will not affect her credit permanently. Federal law requires that the bankruptcy not be included in any credit report 10 years after the bankruptcy was filed.