In general, a bankruptcy will stay on one’s credit report for ten years. This is the simple method for determining credit worthiness, and even affecting possible employment when one files a straightforward Chapter 7 bankruptcy. When one files Chapter 13 bankruptcy, agreeing to pay certain amounts to cancel debt for a set period of time, the bankruptcy usually stays on one’s credit report for seven years.

It has become increasingly more popular to screen potential employees by looking at their financial records. This is particularly the case when the employee might be handling large sums of money, but it may also hold true for other types of jobs. Though it may not be fair, bankruptcy does have a tendency to negatively follow one for a long time.

This does not mean that one cannot get a job, purchase a home, rent an apartment, or even get a credit card within a few years of bankruptcy. However, financial experts warn those who are newly bankrupt to be very cautious about obtaining or using any new credit cards. In fact, paying in cash is often an excellent way to go for a few years after bankruptcy.

Firstly, if a new credit card is offered to one, it is likely to be offered with very high interest and high yearly fees. It may not be worth these fees to have credit. In fact, people who do get credit cards after a bankruptcy are very high risk and are more likely to miss payments or have trouble paying new loans. Missed payments can further damage one’s credit, even more so than a bankruptcy. They establish that one has not corrected financial behavior.

The person who has undergone bankruptcy and then contracted additional debt is most likely to face challenges finding work, renting a house, or buying a car on credit. This is because the person continues to establish a dubious financial record. It is essential that any new debt be contracted only with a great deal of thought, and only when one has the ability to repay debt.

Bankruptcy can occur for many reasons, and they are certainly not all the fault of the person who borrowed money in the first place. Unemployment, sudden grievous illness in the family, or one’s personal illness could all make repaying debt very challenging. When one has been able to recover financially from these setbacks, it can be helpful to inform people judging one by a bankruptcy why the bankruptcy occurred. Most employers, for example can relate to a person’s struggle to find work in a difficult job market, or the need to take care of an ill spouse.

Being upfront about bankruptcy and why it occurred can also score some points with people who are analyzing your ability to be a good tenant. It can help to have letters from former landlords detailing a good payment schedule on past rents. Some people are faithful with their rent, but had difficulty meeting other debts.

For some creditors, however, bankruptcy may have occurred for viable reasons, but it is still treated as a tremendous mark against one’s credit. It also does not matter to them when or why the bankruptcy occurred. It may have happened five or six years ago and still prove a factor. Legally it can be considered until ten years after the bankruptcy occurred.