Discrete-time survival data with time-varying covariates are often encountered in practice. One such example is bankruptcy studies where the status of each firm is available on a yearly basis. Moreover, these studies often use financial and accounting based ratios to predict bankruptcy. These ratios are also yearly measures and hence are time-varying. In this paper, we propose a new survival tree method for discrete-time survival data with time-varying covariates. This method can accommodate simultaneously time-varying covariates and time-varying effects. The new method is applied to a sample of United States firms that conducted an Initial Public Offerings between 1990 and 1999.