Chapter 7 Or Chapter 13?

What filing for bankruptcy really means

does nothing to take the bankruptcy mark off of a credit report until seven years has passed, and customers are still likely to get a less favorable rate.

Legislation that would make it more difficult for consumers to file for bankruptcy under Chapter 7 is making its way through Congress, which some analysts say is enticing people to file now before such laws come to pass, while others simply want a chance to start over and prove they can now manage their finances responsibly.

For Conyer, good money management skills are now a must. “I’m trying to rebuild from scratch because everything that I had already built up got taken away,” she says. “Once you file — whether you’re doing good, bad, or indifferent — it’s there [on your credit report]. That’s the first thing lenders see.”

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