Chapter 7 Bankruptcy
Chapter 7 Bankruptcy is a very specific part of the United States Bankruptcy Code and has a very specific definition. Once a person, referred to in this case as a "debtor," files for Chapter 7 bankruptcy they are allowed to relieve themselves of certain debts they may have accrued. They are also granted protection from any debt collectors by the United States legal system. The downside is that in exchange for relieving themselves of their debts, they have to turn over any qualifying property to the court system.
Getting Credit After Bankruptcy
Obtaining new credit can be difficult after filing for Chapter 7 bankruptcy. Every financial institution, be it a credit card company or a regular bank, ultimately will make its own decision whether to grant you credit. Some institutions may wait awhile to see a history of on-time bill payments. Other institutions, knowing that you cannot legally declare bankruptcy again for another eight years, may be willing to grant credit right away.
Credit Rating
As expected, a Chapter 7 bankruptcy filing will have a negative impact on your overall credit rating. In general, a Chapter 7 bankruptcy declaration remains on your credit rating for 10 years from the date of filing. It is important to understand that the consequences of filing for Chapter 7 bankruptcy are long term and unavoidable.
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