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Bankruptcy Law Research Guide:
Consequences of Filing Bankruptcy

Effect on Credit Report

Under the provisions of the Fair Credit Reporting Act, a bankruptcy can now remain on a debtor’s credit report for 10 years. 15 U.S.C. § 1681c(a)(1). For more information, see the Fair Credit Reporting Act website.

Effect on Ability to Borrow Money

Whether a debtor will be able to borrow money, or borrow money at a reasonable interest rate, depends on the financial situation of the individual debtor.

According to the American Bankruptcy Institute Bankruptcy and Your Future Relationship With Credit website, some creditors are now offering credit to people who have recently declared bankruptcy. The creditors are apparently willing to risk lending to such debtors because certain changes in the law reduce the creditors’ risk:  under the new law, a debtor must wait 8 years after a previous bankruptcy to declare bankruptcy again.

Employment Discrimination

11 U.S.C. § 525(a) prevents a private employer from firing or discriminating against a person because she has declared bankruptcy.

Discrimination by Governmental Entities

11 U.S.C. § 525(a) also prevents governmental units from discriminating against bankruptcy filers in regard to employment or benefits.

Page Updated:  5 November 2008