Monthly Archives: October 2017

Credit After Bankruptcy

1. Bankruptcy can appear on your FICO report for considerable amount of time

It’s implied that going into bankruptcy can cause your FICO assessment to quickly plunge. What’s more, it can stay on your credit score report for a longer time than you think.

2. You must really be more financially sound after your bankruptcy

Looking at this logically, you are in reality MORE reliable after your bankruptcy release than you were already. All things considered, you now have the monkey (your loan) off your back and you have a greater number of assets than you had before paying your bills.

3. After the release, each loan or debt you owe should return to $0 on your report

After your release, you have the privilege (ensured by government law) to have the balance of every debt to appear as $0 on your credit report. Actually, you have the privilege to question any cards that still demonstrate your old balance.

4. In some cases, you can still keep a credit card even after bankruptcy

Trust it or not, you can really keep at least one of your old credit cards after discharge. Keeping in mind the end goal to do as such, you have to reassure the balance with them and go into another understanding. The majority of creditors will consent to do this since they would rather not want to bear the loss.

5. Buying a house post bankruptcy

You can purchase a home subsequent to bowing out of all financial debts. Inside 1.5 to 2 years after your release, many individuals routinely can meet all requirements for a credit with a similar loan terms as they would have in case they had not filed. What’s critical at this stage is your pay, any installment or down payment, and how reliably you paid your home loan previously.

Bankruptcy

There are several key people who are part of the bankruptcy process. The person who is in debt and needs to file bankruptcy is called the debtor, and those who are owed money are creditors. This could be individuals, banks, medical companies, or collection agencies, to name a few. A professional bankruptcy attorney can guide you through the process and ensure that your case is resolved without any trouble. Once your attorney helps you with your paperwork and files your case, everything will be reviewed by a court-appointed trustee. You will meet them at your 341 meeting, where they will verify the information you’ve provided and mediate between you and any of your creditors who attend. The trustee is responsible for investigating possible fraud and resolving your case in a timely manner.

First I always suggest to review your situation to decide if bankruptcy is truly the best option for you or if you can make some changes to get your budget back on track. If it’s time to pursue bankruptcy, finding a Bankruptcy Attorney that can help is your best bet as they can provide you with a list of the documents you’ll need to provide and worksheets to guide you as you complete your paperwork. Before filing, you’ll need to complete an online credit counseling course, where you’ll learn more about bankruptcy and have the opportunity to evaluate your budget. Once you have your completion certificate and your required documentation, you or your Bankruptcy Attorney can go ahead and file your case, which starts the automatic stay. This is a legal order that keeps creditors from contacting you to collect debt; if they do contact you, all you’ll need to do is give them your case number and my contact information. Your next step will be to attend your 341 Meeting, which some attorneys will attend with you, followed by a final online credit counseling course. If you’re filing a Chapter 7, your unsecured debts will soon be discharged, and if you’re filing a Chapter 13, you’ll soon start your reduced payment plan. Your Attorney can help you throughout the process, so that you always know what to expect next.

Lessons Learned From Bankruptcy

Even if you know that bankruptcy is the right choice, it can be discouraging to think about the long-term consequences you’ll need to face after your case is resolved. Most people look back on their bankruptcy as something they never want to do again, but a situation they learned from. After dealing with your debt in this way, you’ll no doubt gain wisdom that will help you in the future or even help your loved ones avoid the struggles you’ve gone through.

Budgeting will be a part of your bankruptcy case and will become second nature after your debts are taken care of. A Bankruptcy Attorney can help as they discuss your case they can see how to best help your situation, you’ll leave with a comprehensive list of tasks and documents to complete. The next step before filing your case, you’ll need to take an online Credit Counseling Course. This class will not only help you decide if bankruptcy is the right choice for you, but a large focus of this class is also on budgeting. A second, post-filing class is also required, which will help you fine tune your budget further.¬†When you first file bankruptcy, you won’t have access to credit for a while, which can be a challenge. That’s why it’s so important to focus on building up your savings account. This way, you’ll have some money set aside for emergencies, rather than inadvertently getting into debt again. If you end up in a situation where you owe on a medical bill, for example, work with the creditor to establish a payment plan, rather than relying on credit cards.

Being in debt can reduce your freedom to live the life you really want to. Instead of deciding where your money goes and how it’s spent, you’re tied to debt payments. Bankruptcy can put an end to this stress and give you a new start. The lessons of rebuilding your credit and living on a budget will benefit you for the rest of your life.

Improve Credit Score After Bankruptcy

Most people don’t pay much attention to their credit score, which is easy to do when you’ve always been able to pay your bills on time and haven’t acquired much debt. But even the most responsible consumers can be hit with unforeseen circumstances such as a job loss or medical bills. Credit cards may be able to float the expenses for a while, but eventually the debt can mount up to a point where payments are no longer manageable. Missed or late payments can lower your credit score, but you may avoid bankruptcy, hoping to stop any further damage. However, sometimes bankruptcy is the correct choice, and there are things you can do to rebuild your credit score after filing.

If you have a pattern of late payments, filing bankruptcy can discharge many of your unsecured debts and put an end to those late payments. A bankruptcy will lower your credit score, but after you file, you’ll be given a “Discharge of Debtor” document that shows your debt has been forgiven. At this point, negative credit events stop, and you can begin establishing a positive credit history. First, you’ll need to request credit reports from the three credit reporting agencies: Equifax, Experian, and Trans Union. Review all of the information listed on your report to ensure accuracy, particularly that any debts included in your bankruptcy show a zero balance. You can correct any errors by contacting the credit agency.

After ensuring you have a clean credit report, you can begin the work of adding positive elements. You will most likely receive credit card offers as soon as your case is resolved, but be sure you review the terms carefully before accepting. You may need to start with a secured credit card with high interest rates and steep fees. While this is not ideal, it’s a place to start, and you can avoid paying any interest by making only small purchases and paying them off completely, on time each month. You might even want to use the credit card for a small monthly bill and set up an automatic payment, essentially ignoring the fact that you have access to credit to avoid the temptation to overspend. As time goes by, you’ll receive better offers for new credit cards or may be able to renegotiate the terms of your current card. Soon, your credit score will improve and you’ll qualify for better and better options.