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Woman cradling her head with bankruptcy documents spread in front of her


Feb. 3, 2021

According to statistics released by the Administrative Office of the U.S. Courts, there were about 764,282 bankruptcy filings in the fiscal year 2020, comprising 23,114 business and 741,168 non-business filings. Individuals and businesses going through financial distress can file bankruptcy to get the immediate debt relief or fresh start they deserve. However, life post-bankruptcy often comes with some surprising changes.

If you're considering filing bankruptcy or if you are concerned about what life after bankruptcy would be like, it is important that you speak with a knowledgeable Texas bankruptcy attorney for detailed guidance. At Oliva Law Bankruptcy, we're committed to offering comprehensive legal guidance to clients in bankruptcy-related matters. Our team will be available to discuss your unique situation and enlighten you about what to expect after filing for bankruptcy.

We proudly serve clients in McAllen, Corpus Christi, Harlingen, Brownsville, and throughout the Rio Grande Valley, Texas.

Creditor Harassment

Creditor harassment can be described as a situation in which creditors and debt collectors use threatening, unethical, and deceptive means to recover debts from consumers. According to the Fair Debt Collection Practices Act (FDCPA), creditors are prohibited from harassing, oppressing, or abusing consumers or anyone else they contact.

Informing Creditors of Bankruptcy

When you file for bankruptcy, the United States Bankruptcy Court will notify your creditors about your filing. A notice of the filing will be sent directly from the U.S. Bankruptcy Court. All creditors listed in your bankruptcy schedule will receive the letter.

Creditor Calls Should Stop

According to U.S. bankruptcy law, once a debtor files for any bankruptcy option and the creditor receives the notice, all debt collection efforts must stop immediately. After petitioning for bankruptcy, an "automatic stay" order goes into effect. The automatic stay is a federal court injunction that prevents creditors from reaching out to consumers who have filed for bankruptcy.

The injunction explicitly states that creditors and third-party collectors are not allowed to call you or send emails, texts, or demand letters. If a debt collector disobeys the automatic stay order and continues calling you, contact a bankruptcy lawyer immediately to protect your rights and take the necessary legal actions.

Credit Report Changes

Filing for bankruptcy affects your credit report in the following ways:

  • Payment History: Your payment history is a vital factor used to determine your credit score. When you petition for bankruptcy, you won't be paying all your debts in full as agreed upon at the outset. As a result of the payment history, future lenders may reject your application.

  • Decrease in Credit Score: Depending on the bankruptcy option you file, your credit score will decrease anywhere between 160 and 220 points. Therefore, turning a good credit rating into a fair or poor one.

  • Qualifying for Future Loans and Credits: Filing for bankruptcy can make it more challenging to qualify for auto loans, home loans, or credit cards because of your decreased credit score.

How Long Does Bankruptcy Stay On Record?

Chapter 13 bankruptcy stays on your credit report for seven years, while Chapter 7 bankruptcy will remain on your credit for ten years. Future lenders can see this in the public records section of your credit report.

Fixing Your Credit

As mentioned earlier, filing for bankruptcy can turn a good credit rating into a poor one. Here are some steps you can take to start rebuilding your credit:

  • Monitor your credit scores regularly and check your credit reports annually

  • Take out a credit-builder loan

  • Ensure that you are zeroed out

  • Apply for a secured credit card

  • Be on the lookout for credit card offers

  • Handle reaffirmed debts carefully

  • Consider bankruptcy-friendly unsecured credit cards

  • Become an authorized user

  • Avoid past mistakes

Even though it is true that filing for bankruptcy may lower your credit score, you can start rebuilding your credit-worthiness as soon as possible, once your bankruptcy successfully closes.

Get Help from an Experienced Bankruptcy Firm

Filing for bankruptcy in Texas involves a lot of complexities. Even though there is life after bankruptcy, it comes with some big changes. Therefore, when considering filing for bankruptcy, consulting with a knowledgeable Texas bankruptcy attorney is crucial for proper guidance and to be educated about what to expect.

For more than 15 years, our team at Oliva Law Bankruptcy has been offering outstanding legal services and guiding clients through life after bankruptcy. Our experienced bankruptcy team can review your financial situation, help you understand your possible options, and determine what bankruptcy option is best for your unique situation.

In addition, our staff can advise you on how to rebuild your credit, build your savings, avoid repeating past mistakes, and take adequate precautions to avoid ending up back where you started. Having our team on your side is crucial to help rebuild your credit and build a stronger future for yourself.

Contact us at Oliva Law Bankruptcy today to schedule a one-on-one case assessment. Our attorneys can offer you the comprehensive legal counsel and advocacy you need to navigate key decisions. We're proud to serve clients across McAllen, Corpus Christi, Harlingen, Brownsville, and throughout the Rio Grande Valley, Texas.