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Oftentimes, when someone comes to see me for bankruptcy advice, they are already thinking beyond the process and into regaining credit. The trouble with this line of thinking is serious. Firstly, the client should be mostly concerned with getting out of debt. After all, the excessive debt is the reason for the consultation in the+ Read MoreThe post The Obsession With Credit Before Filing For Bankruptcy appeared first on David M. Siegel.
When it comes to rebuilding a credit score after filing bankruptcy, the truth is that you have already taken the most important step. After all, the ever more burdensome dead weight on your score, the barrier to you ever obtaining a decent score has now been removed permanently.
If you want to really want to improve your credit score, doing nothing after your bankruptcy discharge and letting time take care of your score is not the way to go.
The first thing is open new lines of credit. This should be done with great caution, and consumers should resolve to pay off accounts each month in full, rather than carrying the balance through several months, where interest and charges are permitted to accrue.
Below are nine rules of the road for building credit in the wake of a bankruptcy discharge:
- Apply for three to five credit cards as soon as your bankruptcy is complete. If you do not qualify for traditional unsecured credit cards, get secured credit cards instead. A secured credit card requires you to make a deposit that is equal to or greater than the actual limit. You will get a monthly bill and you will pay it off immediately. After six to a year timely payments, you may qualify to have the card converted to unsecured status. If your request is granted, your deposit will then be refunded. Otherwise, the deposit will not be refunded until you close the account and pay the balance in full.
- Open all the credit card accounts at once. About twenty percent of your credit score is actually determined by the age of your accounts. Thus, every time you open a new credit card, the average age drops, so the quickest way to start ramping up your score is to start all the cards at once. Though you credit score will initially drop (10 percent of your score consists of credit inquiries), it will rebound and then some after a few month of timely payments.
- Keep the credit cards active while maintaining a low balance or, even better, no balance at all. Moreover, keep the accounts active. Doing so tells the credit bureaus that the bankruptcy created a clean slate for you to begin demonstrating responsible behavior. If you do not use the credit cards, the credit bureaus have no way of knowing whether you can handle debt.
- Remember you want to keep your balances low. The lower your balances, the better your score will be. Honestly your best strategy for rebuilding is to pay one bill every month with each of your credit cards. Then immediately pay the balance on the credit cards in full. Doing so keeps your balance at $0, and all the accounts active.
- Get a copy of your credit report four months after your bankruptcy is discharged(not before) and let our offices know if any of the debts that should be reflected as discharged or in bankruptcy are being reflected as past due, charged off or owing. We want to make sure that these are corrected.
- Contact us via email to get signed up with our credit repair education company for free information on credit score repair.
- Get an installment loan. If you are in the market for a new car or a household appliance, buy it on installment. Taking out an installment loan, and then paying it off in a timely fashion, informs the credit-scoring bureaus that you can manage different forms of credit successfully. Note: This is not an excuse to run out and finance a $30,000 car. Instead, visit your local credit union or a friendly bank and take out a $1000 installment loan on your current vehicle.
- Never miss a payment. The credit bureaus will consider one missed payment a giant red flag, and your credit score will sink.
- Try not to keep a balance over 30 percent of the limit. If your credit card balance goes past 30 percent of the limit, the credit bureaus will assume you are getting in over your head. If you must carry a balance, make sure it is less than 30 percent.
Follow these nine rules for rebuilding credit after bankruptcy and there is really no reason why your score shouldn’t be 720 in less than two years.,
The original post is titled Steps for Rebuilding Your Credit Score After Bankruptcy , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
Some people may wonder if there is a specific time you should file for bankruptcy protection. Better yet, is there a good time to begin the filing process? In most cases, it depends on personal circumstances in your situation. Each person has different needs and this makes each case unique. Most who file are seeking [...]
We recently reported that a debtor could strip off a second mortgage in Chapter 7 due to the decision the 11th Circuit reached in McNeal v. GMAC Mortgage, LLC (In re McNeal) (11th Cir. 2012). At the time the Court ruled in the case the Court decided not to publish the opinion, which meant that lower courts in the 11th Circuit were not required to follow the decision.
However, the Court in McNeal, recently published the opinion, which now means that lower courts in the 11th Circuit are required to follow the decision. Now, debtors in Chapter 7 in the 11th Circuit can strip off wholly unsecured mortgages.
Call us today to find out if you qualify.
We recently reported that a debtor could strip off a second mortgage in Chapter 7 due to the decision the 11th Circuit reached in McNeal v. GMAC Mortgage, LLC (In re McNeal) (11th Cir. 2012). At the time the Court ruled in the case the Court decided not to publish the opinion, which meant that lower courts in the 11th Circuit were not required to follow the decision.
However, the Court in McNeal, recently published the opinion, which now means that lower courts in the 11th Circuit are required to follow the decision. Now, debtors in Chapter 7 in the 11th Circuit can strip off wholly unsecured mortgages.
Call us today to find out if you qualify.
The post ***Update on Stripping off Second Mortgages in Chapter 7*** appeared first on St. Petersburg Law Blog.
We recently reported that a debtor could strip off a second mortgage in Chapter 7 due to the decision the 11th Circuit reached in McNeal v. GMAC Mortgage, LLC (In re McNeal) (11th Cir. 2012). At the time the Court ruled in the case the Court decided not to publish the opinion, which meant that lower courts in the 11th Circuit were not required to follow the decision.
However, the Court in McNeal, recently published the opinion, which now means that lower courts in the 11th Circuit are required to follow the decision. Now, debtors in Chapter 7 in the 11th Circuit can strip off wholly unsecured mortgages.
Call us today to find out if you qualify.
The post ***Update on Stripping off Second Mortgages in Chapter 7*** appeared first on St. Petersburg Law Blog.
Having a judgment filed against you brings with it a new level of debt collection. Thankfully, there are some things you can do to ease the pain.
A judgment is nothing more than a decision by a court that has been entered into the public record.
In order for that decision to be made, someone must file a lawsuit. You get time to formally Answer (that’s a technical term, which is why it’s capitalized) and fight the lawsuit.
If you don’t fight the lawsuit by filing an Answer or similarly responsive pleading then a default judgment will be entered.
If you do fight and lose the lawsuit, a judgment will be entered.
SEE ALSO:
- What Does A Judgment Mean?
- Credit Card Lawsuit – Why You Should Always Fight.
- Here Are Your Options When Served With A Collection Lawsuit
That’s the easy stuff. Now onto the nuts and bolts.
Do I Have A Judgment Against Me?
As noted above, you’re not supposed to wake up one day to find a judgment against you. You’re supposed to receive notice of a lawsuit, followed by a period of time during which you can choose to respond to the Complaint.
That said, it’s possible that the creditor filed the lawsuit and either served you incorrectly or not at all. It’s also possible that you got the lawsuit papers and didn’t realize they were more than just more letters from the creditor.
The most common ways you may find out that there are outstanding judgements against you in one of the following ways:
- letter in the mail or phone call from the collection attorneys;
- garnishee notice from your payroll department;
- freeze on your bank account; or
- routine check of your credit report.
SEE ALSO:
What Happens When A Judgment Is Entered Against You
When you go past due on a debt, the creditor calls and sends letters in an attempt to convince you to pay.
Eventually, it goes to a collection agency.
When all else fails, the matter is turned over to a lawyer. That lawyer files a lawsuit and gets a judgment against you for the specific purpose of getting you to make payments.
The judgment becomes a matter of public record, and is indexed with the clerk of the court. It shows up on your credit report as well as on any background checks.
The judgment is considered a lien against your property, including any real estate that you have, in the state in which the judgment is filed. In other words, a judgment filed in California has no bearing upon property located in New York unless the creditor takes the California judgment to a New York court and has it filed there as well.
What Can A Judgment Creditor Do?
If a judgment has been issued against you, the creditor can satisfy its judgment by freezing your bank account and taking a portion of your wages. Procedures differ from state to state.
For example, in New York the creditor needs to get in touch with an enforcement officer such as a Marshal or Sheriff. Once that happens, he or she can serve a restraining notice on the bank, or on some other person or business that owes money to the judgment debtor, and eventually take the money. If you are employed, the enforcement officer can garnish (take) a portion of your salary to satisfy the judgment.
SEE ALSO:
In California, however, you aren’t allowed to take any action for 30 days from the date that the clerk mailed the Notice of Entry of Judgment. If you don’t take action to resolve the matter during that time, the creditor can:
- Get in touch with you;
- Levy (seize) assets;
- Examine you in court to locate unknown assets;
- Suspend your driver’s license if the judgment is for auto accident;
- Suspend your professional license (example: Contractor’s License); or
- Place a lien on land, buildings, or residence.
How To Resolve A Judgment Against You
Once the judgment is entered and finalized, you can’t fight it anymore. The creditor has claimed that you owe money, and a court has agreed. That said, here are some options for you to consider:
- pay the balance due in full;
- work with the creditor to settle the debt or work out an agreeable payment plan;
- allow the creditor to seize your assets in payment of the debt;
- repay the debt involuntarily through a wage garnishee;
- file for Chapter 7 or Chapter 13 bankruptcy as a means of discharging or repaying the debt (depending on your situation.
SEE ALSO:
- Chapter 7 Bankruptcy – What Is It And How Does It Work?
- Chapter 13 Bankruptcy Basics
- G Is For Garnishment
Which Choice Do You Make?
The judgment creditor can take steps against you to make your life even more difficult. Having all the information you need about your options makes all the difference.
Whatever you do, don’t just ignore things. That only makes it worse.
Here’s What It Means To Have A Judgment Filed Against You – And What You Can Do About It was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Can I keep my car in Chapter 13? Yes, you can keep your car through Chapter 13. If your car is paid in full, it will just increase the amount that you have to pay back to your creditors based on the equity in your car. If you have a car that’s worth $10,000, you’re+ Read MoreThe post Three Big Questions About Chapter 13 appeared first on David M. Siegel.
The elimination of debt through bankruptcy is probably the greatest step any consumer can take towards obtaining financial freedom. For most of our Oregon and Washington bankruptcy clients, eliminating the debts is only part of the process. While none of our clients are hellbent on obtaining another credit card, most of them have very realistic concerns about their credit scores and reports. Everyone, myself included, wants to put themselves in the best possible position to be able to get a mortgage a couple years down the line or not have their credit score be a concern during the interview process.
These credit concerns have made us re-evaluate the product that we offer. We now offer tools for rebuilding credit after bankruptcy. I am really proud to say that we now stand out from other bankruptcy firms in Washington and Oregon in that I believe that we are the only firm that is taking real action in helping its clients obtain financial freedom rather than just eliminating the debts.
To that end, we taken to major steps. First, we have hired a company with a proven track record to provide credit repair education to our clients. Once you have obtained a discharge in bankruptcy, we offer this service free of charge to all our clients. As a result, I believe that I can truthfully say that you will probably have a higher credit score in two years after filing bankruptcy with our firm than if you choose another. Second, we have begun to seriously promote the practice of taking active steps six months out from bankruptcy discharge to ensure that our Washington and Oregon bankruptcy clients’ credit reports accurately reflect all their debts as discharged.
The first step towards cleaning up your credit report is obtaining a copy of your credit report six months after your bankruptcy discharge and then sending a copy of it on to me. The first step towards rebuilding your credit score is requesting a login and password for our credit repair education classes so that we can get your started.
If you have filed bankruptcy with our firm and haven’t begun the process of getting your credit report cleaned up and rebuilding your credit score make sure to contact us today. We would be more than happy to help.
The original post is titled Rebuilding Credit Scores After Bankruptcy Discharge , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
Distinguishing differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy may be just the beginning in understanding which chapter will provide the best solution for your situation. Even if you meet qualifications to file Chapter 7, it may be more beneficial for you to file Chapter 13. In other words, you may give yourself more [...]
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