When people in Iowa consider declaring bankruptcy, there may be a number of factors that hold them back from taking action. One of the most obvious concerns is the hit they take to their credit report. At the same time, however, many people struggling with insurmountable debt already find their credit ratings going down, especially as they rack up late fees, unpaid bills and creditor calls and judgments. People may also be concerned because a credit score can affect a number of aspects of life, from car insurance rates to some employment prospects.

Some researchers say that, while many people fear losing their jobs or being unable to find a new one after declaring Chapter 7 bankruptcy, the statistics do not show that bankruptcy harms opportunities for employment. After the financial crisis of 2008, there were a significant number of bankruptcy filings, providing a strong base of information about the effects of personal bankruptcy on each person’s financial future. There are two types of personal bankruptcy, Chapter 7 and Chapter 13. While Chapter 7 requires liquidation of assets in order to wipe away debts with the proceeds, Chapter 13 involves a payment plan for repayment while people keep their assets.

While a Chapter 7 bankruptcy disappears from a credit report after 10 years, a Chapter 13 bankruptcy can be off the record in seven years. That three-year gap provided researchers with the option to see how the credit report flag affected people’s jobs. While people without a current bankruptcy listed on their credit report were more likely to have mortgages and high-limit credit cards, both groups were equally likely to be gainfully employed.

For people dealing with unrepayable debt, personal bankruptcy may offer an opportunity for relief. An attorney may provide advice on the effects of bankruptcy on a client’s financial future.