Warren & Migliaccio, L.L.P.

Texas Family, Estate and Debt Relief Attorneys

Call For A Free Consultation (888) 584-9614
  • Our Team
    • Gary Warren
    • Christopher Migliaccio
    • Jonathan Frederick
    • Dan Varkey
    • Traci Diamond
    • Sabah Hafiz
    • David Lane
    • Morgan Gill
    • Brandon Beuerlein
    • MaDonna Harmina
  • Bankruptcy
    • Why Meet with Us?
    • Chapter 7 Bankruptcy
      • How to File Chapter 7 Bankruptcy in Texas
    • Chapter 13 Bankruptcy
    • Debt Resolution
    • Benefits of Bankruptcy
      • Stop Creditor Harrassment
      • Keep Your Property
      • Stop Foreclosure
      • Eliminate Credit Card Debt
      • Rebuild Your Credit
    • Bankruptcy Myths Debunked
    • Creditor Harassment
    • Tax Debt
    • What is a Wage Garnishment?
    • Bankruptcy Video Center
    • FREE Bankruptcy E-Book
  • Debt Lawsuits
    • Being Sued by Debt Collector? What you need to Know.
    • What to do when you are being sued by Credit Card Company
    • Is it possible to be Judgment Proof?
  • Divorce
    • Divorce Timeline and Roadmap
    • Contested Divorce
    • High Net Worth Divorce
    • High Conflict Divorce
    • Spousal Maintenance and Support
    • Post-Divorce Modifications
    • Military Divorce
    • FREE Divorce E-Book
  • Child Custody
    • Types of Child Custody in Texas
    • Child Support Modifications & Enforcements
    • Child Support: The Details You Should Know
    • Texas Standard Possession Order
    • Texas Child Custody Calendar 2024
    • Right of First Refusal
  • Estate Planning
    • Our Services
    • How it Works- Your Client Journey
    • Estate Plan Express
    • Wills
    • Revocable Living Trusts
      • 9 Reasons You Need a Revocable Living Trust in Texas
      • Making and Funding a Living Trust in Texas
    • Is It Time to Update Your Estate Plan?
    • Dying without a Will
  • Estate Plan Express
    • Estate Plan Express: Get an Attorney Drafted Will Online in Texas
    • Our Levels of Texas Estate Planning Services
  • Blog
    • Articles
    • FAQs
      • How to create a Skype Account for Virtual Video Meetings
      • Get Tax Transcripts or Tax Returns
      • Get Your Free Credit Report
  • Next Steps
    • Contact Us
    • Client Testimonials
    • Make a Payment
    • Camp Lejuene Victim Support
      • How we can help
      • Top 5 Questions and Answers About the Camp Lejeune Lawsuits
      • Symptoms of Water Contamination
You are here: Home / What Happens To Your Credit Report When You File Bankruptcy?

What Happens To Your Credit Report When You File Bankruptcy?

Interviewer: Are there other misconceptions about bankruptcy?

Chris: One of the big misconceptions- which I think is a fear factor by credit card companies and other creditors to get people to pay bills they can’t afford- is the effect on your credit report. Most times, people come in and say, “I don’t want my credit to get bad.”

Well, a lot of times your credit is already bad. This is because you have been missing payments. You have not been able to keep your budget straight because of all the extra bills you acquired over the years. So, bankruptcy is not necessarily going to make your credit report much worse than it already is.

No way am I saying that bankruptcy has an immediate good impact on your credit report, but it can help eliminate debt. One of the criteria I always find when I go to buy a car or even get a house is they look at your credit report and compare your income to your debt.

If you have not filed for bankruptcy but you have $50,000 worth of credit card debt and make $50,000, you might have problems getting loans. Whereas, if you have a bankruptcy on your record but you have no debt and you have that same job for $50,000, that might help you with your debt to income ratio.

So a common misconception is that bankruptcy is the black eye of your credit report. I disagree with that. I do not give loans to people for a living, so everybody has their own opinion on it. However, just looking at the numbers, a person’s debt to income ratio after filing bankruptcy can improve greatly.

Interviewer: There is a misconception out there that once you file bankruptcy it scars you forever. For credit purposes, how long does it last:  seven years, 10 years, 13 years?

Chris: The general rules are that Chapter 13 will be on there about 8 years; whereas a Chapter 7 will stay on there up to 10 years. Here’s the real lowdown: The further you get away from the bankruptcy, the less of an impact it has on your credit report.

I very often get calls from clients who are in bankruptcy or have just gotten their discharge. They are getting mail asking them to buy a car or giving them a credit card. So you will get offers for those items, and time heals. Also, as you get further away from your bankruptcy discharge, your credit will continue to get better.

Let’s just go back to the $50,000 worth of credit card debt. Suppose you do not do anything about it. If you have $50,000 of credit card debt on your credit report now, three years from now you still have $50,000. So you are really not making much progress.

Interviewer: We are not lenders. However, suppose we have two people. One filed bankruptcy a year and a half ago and has no debt, and the other one has $50,000 in debt. The one that filed actually looks better to me.

Chris: You are right. Here is another thing. Creditors are not our friends. They are business people. In bankruptcy, you are limited on how often you can effectively file bankruptcy and get that discharge.

So you are a lender, and I come to you a year after I filed bankruptcy. Scenario A, I come to you. I have $50,000 worth of credit card debt and I make $50,000. Scenario B, I come to you and I just got out of Chapter 7 discharge. So I make $50,000 and have zero credit card debt, but I have the bankruptcy on my credit report.

In Scenario A, you are looking at me saying, “I am just going to be another lender adding to your $50,000 worth of debt. At some point in time, are you going to stop paying me? How are you going to choose me? Are you going to choose me over other guys?”

In scenario B, I have no other creditors or very few creditors; maybe a house note. You feel a lot more comfortable as a lender saying, “This guy doesn’t have anyone else he owes money to, so it won’t be as hard a choice who he pays.” The other reason the lender might like you in scenario B better is because you are barred from filing an effective bankruptcy, for a certain period of time.

In scenario A, the lender may think this guy is only a year, or a few months away, from having to file bankruptcy; whereas in scenario B they know. Lenders know the law. This guy is not going to be able to get a discharge for maybe eight years or so. So from a selfish standpoint, lenders will like you in scenario B just because it is in their better interest for getting paid.

Get Help Now!

Schedule a Free Consultation

If you need to speak with an attorney at Warren & Migliaccio, L.L.P.  submit our contact form below or call (888) 584-9614 to schedule a free consultation.

Nav

  • Texas Bankruptcy Attorneys
  • Chapter 7 Bankruptcy Attorney in Dallas
  • Chapter 13 Bankruptcy Lawyer in Dallas
  • Child Custody Attorneys in Dallas and North Texas
  • Child Support
  • Divorce Attorney in Dallas & Collin County – Serving All of DFW and North Texas
  • Family Law
  • Spousal Support
  • Personal Injury
Christopher Migliaccio, attorney in Dallas, Texas
About the Author

Christopher Migliaccio is an attorney and a Co-Founding Partner of the law firm of Warren & Migliaccio, L.L.P. Chris is a native of New Jersey and landed in Texas after graduating from the Thomas M. Cooley School of Law in Lansing, Michigan. Chris has experience with personal bankruptcy, estate planning, family law, divorce, child custody, debt relief lawsuits, and personal injury. If you have any questions about this article, you can contact Chris by clicking here.

Connect With Us

facebook logo twitter logo youtube logo instagram logo


More Resources
Blog
Articles
PaymentPortal

Schedule Now
(888) 584-9614

Next Steps

  • Contact Us
  • Testimonials
  • Make A Payment
  • Blog
  • Articles
  • FAQs

Pick a Topic and Empower Yourself

  • Bankruptcy
  • Chapter 7 Bankruptcy
  • Chapter 13 Bankruptcy
  • Child Custody
  • Child Support
  • Estate Planning
  • Divorce
  • Divorce & Your Children
  • Family Law
  • Stop Foreclosure
  • Spousal Support
  • Auto Accidents
HomeDisclaimerPrivacy PolicyTerms of UseContact UsSite Map
© 2025 Warren & Migliaccio, L.L.P. All Rights Reserved