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John F. Roberts, Esquire Jeanne E. Hovenden, Esquire
Serving all of the Greater Richmond, Virginia, Metropolitan and Tri-cities Area, and Surrounding Counties 7459 Old Hickory Drive Mechanicsville, Virginia 23111 (804) 746-4000 Richmond Area (800) 388-8298 Outside of Richmond Area (804) 746-4146 Facsimile |
The Bankruptcy Process
What Effect Does Bankruptcy Have On Credit Ratings Or Employment?
A bankruptcy filing can be reflected on a debtor’s credit record for up to ten years, regardless of the type or outcome of the bankruptcy case. A bankruptcy filing may also affect a person’s ability to borrow money, although the effects of such a filing vary significantly depending on the creditor and the nature of the debt. For example, a person’s ability to obtain refinancing on a home mortgage may not be adversely affected by a prior bankruptcy filing as long as payments on similar obligations have remained current. The ability to obtain post-bankruptcy credit or to incur additional debt after a bankruptcy filing may be limited in a Chapter 12 or 13 case because all of the debtor’s disposable income must already be committed to repayment of prior creditors’ claims under a plan. Otherwise, there are no legal prohibitions or restrictions against borrowing money, owning property or transacting business after a bankruptcy filing other than the restrictions set forth in the Bankruptcy Code.
Private employers are prohibited from terminating or otherwise discriminating against an individual solely because of a bankruptcy filing. A governmental unit may not terminate or refuse to hire a person solely as a result of a bankruptcy filing. Similarly, a governmental unit may not deny, suspend or refuse to renew a license, permit or similar grant to a debtor as the result of a bankruptcy filing.