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# How Bankruptcy can affect Your Credit History

You are laden with debt and experience grave difficulties in paying up. You work from dawn till dusk and hold two jobs, but your income is still inadequate to pay off your outstanding credit card balances. You feel like you are left with no choice but to declare bankrupt and get your debt wiped out. At least you can start on a clean slate and be more careful with your spending next time.
Before you file for Chapter 7 or Chapter 13, it pays to evaluate the consequences of declaring bankrupt. Although it may seem like the best option you have at the moment, it pays to consider the future consequences of going bankrupt.
For one thing, being bankrupt will leave mark on your credit history. If you had filed under Chapter 13, your bankruptcy record will usually remain for 7 years, while Chapter 7 will result in a bankruptcy record for between 7 and 10 years. This means that you will face much restriction on your finances at least for the next 7 years.
Although you may still be eligible for credit cards, your tarnished credit history will result in credit card companies charging you sky-high interest rates. You are of high credit risk to them, and they have every right to charge you a higher cost of offering you credit.
If you are thinking of getting a car loan, you will also be charged high interest rates. Does this mean that you will walk to work for the next 7 years? As cars are usually a necessity, you would probably have to bear the additional interest costs until your term is up. Of course, there have been circumstances where you can engage a car loan lender to negotiate for better terms with financing companies.
Another controversial consequence of a bad credit history has to do with your future employment possibilities. There have been cases where employees have been dismissed from well-paying jobs due to their credit history. This happened as these employees have been labeled a credit risk to the company they are working for. With their bankruptcy history, they are considered to be easier to bribe as compared to other employees.
With all these consequences laid out, it truly pays to think it through before taking the easy way out. Declaring bankrupt may not always be your only choice, as there are better ways for you to deal with your debt. These could include borrowing from friends and family to finance your debt, implement better budgeting strategies or refinancing your home to acquire funds at lower interest rates to pay off your debt.
Alan Bernstein recommends Find Credit Cards to apply for an Advanta credit card today.

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