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In the modern era, debt is not a simple matter between you and your creditors.  Anyone who has ever rented an apartment, applied for a credit card, or tried to set up payments on a new car knows that credit scores play a significant role in determining whether you will be able to obtain credit.  For those who have had financial difficulties, this can be frightening, especially if those difficulties have resulted in bankruptcy.  Bankruptcies can remain on your credit report for up to ten years, and a bankruptcy will affect your credit score as well.  But you can take steps after your bankruptcy to improve your credit—all is not lost forever.
Of course, when you go through a bankruptcy, you should have a licensed attorney by your side to make sure that your interests are protected and that all of your debts are properly handled.  When you go through the process with your attorney, you can discuss your specific situation and how you should move forward after bankruptcy.
However, a report by USA Today discusses some common strategies to improve your credit.  These strategies are all part of the “conventional wisdom” on improving your credit, but they should be discussed with an attorney before making any decisions.  The strategies include:

• Opening a new credit card;
• Checking your credit score online; and
• Taking on a new loan to improve your mix of accounts.

Opening a New Credit Card
For people whose financial problems were at least in part due to excessive credit card use, this may not be the best method for improving credit.  Building up more debt can just create a cycle of problems.  This can also be a poor strategy if the only credit card you can obtain comes with annual fees.  You do not want to have to pay a fee just to keep the card open.
But, if your bankruptcy, like many, was due to a one time catastrophic event, like a medical crisis, and that crisis has passed, you may consider this strategy.  A large part of your credit score is affected by what is called your “credit utilization ratio.”  Basically, this is the amount of credit you are using on your credit cards compared to the total amount of credit available to you.  Taking out a new card and not using it can improve this ratio, and thus improve your credit.
Checking Your Credit Score Online
Immediately following a bankruptcy you should have a crystal clear picture of your financial situation.  But over time, this will change.  In order to make sure you are getting credit for all of your responsible bill paying and not being wrongfully blamed for financial mistakes, you will want to check your full credit report annually.  Credit reports, especially free ones, do not necessarily include your FICO credit score.  The FICO score is what most lenders will look at to determine your credit.  Until recently, you had to pay to get this score.  However, now some lenders and some credit card companies are providing your score for free on your monthly statement.  So if you are in the market for a new credit card, you may want to shop for one with this specific benefit.  There are online companies that offer so-called free credit scores, but many of them come with a whole host of strings attached, and wind up costing more than they are worth. Others provide their own proprietary credit scores, not the official FICO score.
Taking on a New Loan to Improve Your Mix of Accounts
A very small portion of your credit score comes from the types of accounts you have on your report.  This leads some people to take out loans that they don’t really need to improve their credit rating.  This is generally not a good idea unless you are able to get a fee-free loan at zero percent interest, which is extremely unlikely for anyone, let alone someone who had gone through bankruptcy.
Ultimately, the obstacles faced after bankruptcy can be difficult to navigate alone. For help with any bankruptcy-related issues though, the attorneys at the Law Offices of Stephen B. Kass, PC are prepared to help.
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Would allowing private students to be discharged in bankruptcy really solve the problem?
The CFPB (as well as just about anyone else who thinks about student loans on a regular basis) recognizes that the private student loan market is a lion’s den for students who need to borrow for higher education.
The loans come with higher interest rates, offer none of the programs for income-based repayment or forgiveness of their federally-guaranteed counterparts, and, consequently, suffer a higher rate of default.
Student borrowers, meanwhile, are faced with an ever-increasing cycle of collection activities culminating in lawsuits, judgments and enforcement mechanisms such as wage garnishment and bank account levies.
What’s to be done?
One recommendation set forth by the CFPB is that Congress amend the bankruptcy code to allow borrowers to discharge their student debts without the need for a separate judicial determination.
But the consumer watchdog stops short of recommending an across-the-board discharge of private student loans. After all, the agency recognizes that the big banks aren’t going to let that slide without a major fight.
Instead, the CPFB suggests that private student loan lenders be offered a choice – offer flexible repayment options or face discharge of the debt in bankruptcy.
In some ways, this attempt to force a project akin to the loss mitigation procedures offered for mortgage claims in some areas (most notably the program created in New York City, which works quite well) is interesting and possibly of great value.
Bringing the lenders to the proverbial table will allow student borrowers to level the playing field, something not currently possible in large measure because private student loans are securitized.
Just try to get someone on the phone with decision-making powers when it comes to a private student loan. The only way to do it is to wait until the lender sues you – at least then you’ll be able to get a lawyer who represents the securitized trust on the line.
When the story circulated on Twitter, Wes Huffman, director of research and communications at Washington Partners, stated that, “[a]llowing private loans to be discharged would be minimal to no help to borrowers. It is a co-signed world.”
And in a single tweet, Huffman nailed it. The white elephant that’s been standing in the middle of the room the whole time.
All across the country are millions of parents, grandparents, uncles, aunts, and friends who cosigned for someone else’s private student loans. Those loans are given partially on the basis of credit score and ability to pay, and students routinely turn to others as guarantors and cosignors.
When the student finishes school and is unable to get a job that pays enough to repay the loans, the cosignor is left holding the bag. The student is struggling to pay the rent each month on a barista’s salary, so he or she is less likely to be concerned with the negative impact of nonpayment on a credit score.
The cosignor, on the other hand, has more to protect. We’re talking about wages, real estate, bank accounts, and a need to maintain a good credit score in order to finance future purchases.
Now you see why discharging a private student loan in bankruptcy is a problem. Even if the borrower gets relief, there’s no protection for the cosignor.
Perhaps what we need to do is not only bring this new loss mitigation and dischargeability procedure into bankruptcy court, but require that such procedures expand and extend the effect of the modification or discharge to coborrowers much in the way that the community discharge protects married couples in community property states.
Such expansion would help not only coborrowers of private student loans, but those who are jointly obligated on other unsecured debts as well. Credit cards and personal loans, to say nothing of mortgages and car loans, carry the same risks in bankruptcy – the person who files for bankruptcy gets the benefit, the coborrower is left holding the bag.
It’s time for consumer protection laws to reflect the dynamics of today’s cosigned world.

Expenses based on IRS Collection Standards On May 9, 2014, the U.S. District Court of the Southern District of Florida issued its decision in In  re Claudio Lorenzo,  Case No. 13-23100 (S.D. Florida 2013) which affirmed the Bankruptcy Court's order in Case No. 09-28532.  The issue in this case involved what expense standards applied in a modification of a chapter 13 plan.  The Court upheld the Bankruptcy Court's ruling that 11  U.S.C. §1329 incorporates the requirements of section 1325(a) but not the requirements of section 1325(a), which incorporates the provisions of section 707(b)(2)(A) [the standardized IRS collection standard expense].   The Court agreed with other courts that have held that section 1325(b) only comes into effect in the confirmation of a plan, but not in the modification of a plan.  "Plain Meaning"  District Court found that the "plain meaning" of section 1329 of the Bankruptcy Code supported the Bankruptcy Court's finding that Section 1329 only incorporates four specific four statutory provisions and "implicitly excluded other provisions" ("expressio unius est exclusio alterius") - that is, it included Section 1325(a), but not 1325(b) [which mandates the use of the expense amounts set forth by the IRS collection standards used in the "means test"). The Court favorably cited the case of In re David, 439 BR 863 (Bankr. N.D. Ill. 2010). Different Processes: Confirmation - Modification The Court explained that modification is not a type of confirmation, but is instead "a process that takes place after confirmation."  The Court cited In re Sunahara, 326 B.R. 768, 781 (BAP 9th Cir. 2005) where the Court held that "[s]ection 1329 (b) expressly applies certain specific Code sections to plan modifications but does not apply §1325(b). Period." Judges Lundin & Brown: Varying Positions The treatise Keith M. Lundin & William H. Brown,  Chapter 13 Bankruptcy, 4th Edition, §255.1 states that the Bankruptcy Code is "unclear whether the disposable income 1325 (b) applies at modification, that different rules of statutory construction lead to contrary results and that the legislative history is not illustrative. Judge Lundin opines that the language of sections 1329 and 1325 "somewhat favors" the interpretation that section 1325(b) applies at plan modification as well as plan confirmation.  But Judge Lundin further noted that some courts hedge the application of section 1325(b) to only "egregious" or "extraordinary" facts.  
Jordan E. Bublick is a Miami Bankruptcy Lawyer - www.bublicklaw.com

Historically, people who have experienced crushing debt have faced seemingly endless harassing phone calls from debt collectors.  Consumer protections are in place to help limit the worst of these calls.  Debt collectors have now moved on to a new technology to attack Americans who struggle to make ends meet.  Now the collectors have taken to social media.
Debt Collectors on Facebook?
The Pittsburgh Post-Gazette reported on the case of a man who says his experience with a collection agency that was hired to collect his student debt went from being merely annoying to borderline cyber-stalking.  The man’s student debt had ballooned well into six-figures due to non-payment, so in 2012 he hired an attorney and accountant to set up a payment plan.  He thought he was taking the proper steps to resolve the situation, and that harassment from collectors would stop.
Then, a picture of the man with a PBS personality at a cafe was posted to Facebook and shared more than fifty times with more than 5,000 total people.  A few days later someone contacted the café claiming he was trying to reach the man.  The caller left a phone number that belongs to a New Hampshire collection agency.
Stories Like This Are Common
This man is not the only one affected by debt collectors’ move to social media. NBC News reported on the story of Melanie Beacham in Tampa, Florida.  Ms. Beacham fell $362 behind on her car payment.  A collection agency, MarkOne Financial, called her repeatedly, sent her emails, and left her text messages.  Then, the debt collector went a step further.  Using Ms. Beacham’s Facebook account, the collection agency started contacting Ms. Beacham’s friends and family and asking them to have her call the company.  MarkOne had her home address, home phone number, work phone number, and email address.  Ms. Beacham had agreed to a payment plan with MarkOne, but the collector resorted to social media anyway, involving countless other people and humiliating Beacham.  Beacham sued MarkOne, and the case is currently pending.
The Federal Trade Commission and the Consumer Finance Protection Bureau state that the Fair Debt Collection Practices Act of 1977 applies to collection attempts made through digital media, including social media and text messaging.  The Federal Trade Commission provides consumers with information about this act, including what an individual’s rights are under the act.  It is important to note that the act only applies to the collection of debts owed by an individual—business debts are not covered by the act.
The FTC and CFPB’s stance does not mean that social media is totally off limits for debt collectors.  For example, if your address or phone number are publicly available on your social media page, then they are fair game.  But if a collection agency were to pose as your friend to gain access to private information, they may be in violation of federal law.  Also, if you have hired a lawyer to handle your financial issues, and the collection agency knows you have a lawyer, it would be unlawful for them to continue to contact you through any means, including social media. If you do need legal representation, call us today at the Law Offices of Stephen B. Kass, PC today to see how we can help you.
 
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