Get back on the road to good credit
By | February 18, 2008
There is a common consensus to the fact that a bankruptcy is the worst possible entry on your credit report. Filing for bankruptcy whether a Chapter 13 one or a Chapter 7 one is a sign that you clearly cannot manage your credit. Notwithstanding the reasons for which you filed for bankruptcy such an entry shows for 7-10 years on your credit report. Whether you had genuine reasons for filing for bankruptcy or not doesn’t matter, because at the end of it all it shows on your credit report.
However there ways you can recover from this. There will be a lot of effort and dedication involved on your part but within a year and a half your credit score can brought back to the high 600 range. The basic truth is that no one can improve your credit score as successfully as you can yourself and you don’t need any special skills or talents for it. It is time for you to realize the seriousness of your situation and start taking positive action to improve it. If you need to get help to help your get over the problem you could always try credit counseling agencies and of course friends and family.
A low credit score can cost you jobs, money and many other opportunities because high paying jobs and jobs that trust you with a lot of money always go into a person’s credit report and people will low credit scores are generally left out. Make small purchases which let you stay in your budget and try to make a down payment on at least 50% of the amount and pay off the rest within 6 months. If you continue to make payments on time your will have a few good credit entries in your report. Also monitor your credit reports and you can request a credit bureau to send you one periodically. So you can get back on your feet pretty quickly.
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How to build good credit after bankruptcy
By | February 15, 2008
For most people bankruptcy is the last option when they have unpayable debts. This is because even though bankruptcy wipes off all your debts and relieves you from creditors, it does have an effect on your credit record. A bankruptcy usually shows up on a credit record for around 8-10 years after filing for bankruptcy. However there are a few things one can do to improve your credit even while the black mark of bankruptcy still remains.
The first thing you should do is to apprise yourself of your credit status. This you can do by asking for your credit report from all the major national credit bureaus. Peruse them all carefully and this will give you a good idea of where exactly you stand.
In case you find any errors or inaccuracies on any of these reports you should send a letter disputing the fact to each of the credit bureaus from where you obtained your credit report. They will then investigate for 30 days and if your claims are found to be correct, appropriate corrections will be made.
Once you know what your situation is you should try to build a good credit record. Since there is no way you can erase your bad credit record, you should try by adding good credits and building up your record.
Another very essential thing to do is to have your progress monitored. For this you can get a credit card monitoring software and this can be used to track your credit scores and as you continue to behave in a responsible manner, your credit score shall continue to improve.
Bankruptcy doesn’t necessary mean that you shall have a bad credit record all your life, but you need to take active steps to improve your credit record and better your financial future.
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Chapter 7
By | January 31, 2008
Bankruptcy laws allow for a debtor who is unable to pay off his creditors to resolve his debts through the division of his assets among his creditors. Chapter 7 of the Bankruptcy Law is called liquidation bankruptcy and it involves the complete liquidation of the debtor’s assets and then the proceeds are used to pay off his debts.
There are a few steps involved in filing for bankruptcy:
<!–[if !supportLists]–>· <!–[endif]–>The court clerk will give a notice of your bankruptcy to your creditors.
<!–[if !supportLists]–>· <!–[endif]–>Then a meeting of your creditors will be held so as to question you about your debts and your ability to pay them back. Some may also want to question you.
<!–[if !supportLists]–>· <!–[endif]–>A creditor of the trustee who is assigned to your case may object to the exceptions listed by you within 30 days of the abovementioned meeting.
<!–[if !supportLists]–>· <!–[endif]–>In case a debt is not listed in the schedule then a creditor may object to its discharge. In such case he can file asking for proof of such claim.
<!–[if !supportLists]–>· <!–[endif]–>You should consult a bankruptcy attorney or lawyer who will guide you. Bankruptcy filing involves a lot of procedures and it would be advisable to have someone to advise you.
You could pick the best lawyer for you in the following manner:
A lawyer should be specialized and trained in the field and most of his practice should be in this area. It is better to have a certified specialist. He should be committed to get you debt relief and provide you with information and advice on how to secure your future.
He should also stop creditors from harassing you. You should also take advantage of the fact that your lawyer is an expert and you should try to get the best possible deal for yourself out of the situation.
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How to re-establish your credit
By | January 22, 2008
After going through the long and tiresome process of filing for bankruptcy the worry that most people have is whether they will be able to stand on their feet again. But if you look on the bright side it is true that no matter how bad your financial condition is if you plan well and stay within your limits you can be financially secure once again. Though your credit rating will be shaken there are things you can do to re-establish your credit.
It is a fact that it takes about a year and a half of paying your bills on time to re-establish a good credit rating. Thus it is in your hands to improve the state of your finances. Though it is a difficult and uphill task re-establishing credit can be done with responsible behavior.
The first step to putting yourself back on the road is getting a job. In the beginning even a part time job will do because your basic effort over here is to build a steady history of work within as little time as possible. You will also have to obtain credit records from credit bureaus.
Next what needs to be done after all your credit card debts are paid is to get rid of your credit cards keeping two at the most. With this you send out the intention to be more careful with your credit. Sometimes it may not be that easy to get a credit card with your history so you can apply for a secure credit card.
It is essential to open a savings account in a bank and deposit money into it regularly. It is also extremely important to pay your bills and time so that you don’t accumulate debt over a long period of time. Open a checking account so that you make sure that none of your checks bounce and you are responsible with your finances.
Paying debt and maintaining a good credit rating is never easy and you should always be open and communicate regularly with your creditor. They might help you by giving you advice on how to make your payments. Also it is important to prioritize your expenses keeping necessities like food, rent, gas etc. at the top and also by paying off debts with a higher interest rate first.
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get youself a good lawyer
By | January 17, 2008
Declaring bankruptcy is a hard choice for everyone but sometimes it can be good for you. When you are in a critical financial position it may sometime be better to file for bankruptcy. In such an event you need a good bankruptcy lawyer. One can never be sure whether he is picking the correct person to represent him but if you go to the meeting with the lawyer prepared you can help yourself make a better and more educated decision.
The basic duties of a lawyer are to uphold the law and also protect the client’s interest. In addition to having several academic prerequisites it is necessary for a lawyer to have passed a character and fitness review and have a license from the Supreme Court. Besides all this of course he should be a good communicator who can interact easily with you and also get your grievances and demands across to the judicial body.
When you go to the lawyer he should be able to give you a basic outline of your legal position and what you can expect reasonably. The first meeting is the best time to make certain that your lawyer is well aware of bankruptcy laws and procedures and is also thorough with your case. You might also want to ask your lawyer a few questions during your meeting. Ask him about his experience and the fees that he charges. You also have a right to ask him about the probably outcome of your case and whether there is anything you could do to help your case. You’ll also need to sort out any differences or issues you might have between yourself about what course of action to take.
A good lawyer who understands your problem will probably be able to reduce the impact of the problem on you and make things far simpler.
Topics: Bankruptcy Protection, Personal | No Comments »
mortgage loan after bankruptcy
By | January 9, 2008
The problem that most people face when contemplating whether to file for bankruptcy is the thought of what happens after it. Beginning life after bankruptcy can be difficult and lenders are not very willing to advance loans to people with poor credit ratings. However these days things have become a bit easier. Lenders are more open to advancing loans to people with bankruptcy on their credit report. If you’re looking to get a mortgage loan after bankruptcy there are a few things you need to consider:One thing that you should remember when applying for a mortgage loan after bankruptcy is that though people might still be willing to advance money to you, the interest rates will be high. However once two years have passed since you filed for bankruptcy the rates fall. Within two years of filing for bankruptcy interest rates are very high. Once the two year period is over lenders consider you less risky and advance money at a lower rate.Another thing is that the higher the down payment on your loan the more likely you are likely to get it. Lenders use what is called a Loan to Value ratio. Here the loan amount is divided by the value of your house. If your LTV is less than 80% you are highly unlikely to get a loan.There are certain lenders who cater specially to people who have been through bankruptcy. These lenders also do not charge a much higher interest rate as you are not perceived as being a risk. This is because all their clients have bad credit histories and you are part of that business.Thus life is not over after bankruptcy. It is certainly tough the first couple of years but being a little smart about your money and looking out for all available options will help you tide over the rough patches.
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Automatic stays after bankruptcy
By | January 4, 2008
Filing for bankruptcy provides an automatic stay. Once you file for bankruptcy creditors have to stop collecting money from you. They cannot send you letters for collection, you cannot be sued for your debts nor can your car be taken away from you. This automatic stay provision comes into force and protects you from almost all collective activity with very few exceptions. This stay stops the following emergencies:
Foreclosure: If your home is in foreclosure the automatic stay will stop the foreclosure action. Filing for bankruptcy will temporarily halt foreclosure action.
Utilities: If the electricity and gas supply to your house has been cut off, filing for bankruptcy will bring the automatic stay into force which will force the company providing the utilities to reconnect your service.
Repossession: The finance company or bank cannot take back your car once you have filed for bankruptcy. This however is a short term solution. In the long run you will either have to give up your car or reaffirm the loan.
Taxation: Once you have filed for bankruptcy the automatic stay will stop the IRS from issuing a tax levy on you or seizing your property to satisfy your tax debt. It can however still perform an audit on you, demand that you file your tax returns and assess you tax liability and demand that you meet it.
Automatic stays however are not all powerful and they do not work in the following situations:
Criminal Proceedings: The automatic stay cannot prevent criminal action being taken against you. Only in a situation where the action can be separated into criminal and debt related the creditor is prevented from making a claim.
Support: Furthermore a lawsuit against you seeking child support, maintenance or establishing or modifying parental rights will not be stopped by an automatic stay.
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How to solve bad debts
By | December 27, 2007
Being bankrupt can be extremely difficult and traumatic for a person but there are ways to get out of it. The road leading away from bankruptcy is one of the hardest but it can be done. However there are things you could do to avoid having to file for bankruptcy:
If you have assets you could use them to fight off your debt problems. For ex you could take a loan on your house or car. The rate of interest would be much lower than on a credit card loan and so with curtailing your expenditure you could manage to pay off your debts pretty soon. Or you could sell some of your assets to pay off your debt.
You could always try to substantiate your income a little further by working an extra job. This would really help to pay off your debts and also have a fairly decent standard of living. Also you should always pay off the debts with the higher interest rates first because you want to minimize the amount you end up paying towards your loan.
Credit cards are another thing that just add to the problems. They further add to the interest burden and you tend to spend more. It’s best to stop your credit card and keep one just in case. Don’t use them however for shopping and such things.
You should cut down on some aspect of your monthly budget and use that amount to pay off the debt.
Another option is to consolidate your debt or revise the term of your loan. If you take one debt to pay off all your debts that is easier but you shouldn’t get pulled into the debt trap. Also you could take a higher loan at the same rate and use that money to pay off the loan.
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Down the path to bankruptcy
By | December 19, 2007
When a person declares that he is financially insolvent he is considered to be bankrupt. When an individual is unable to manage and pay off his debts. A person has to have a debt of a certain amount of loan in order to be able to file for bankruptcy. It varies from country to country but in the U.S the debtor must be in arrears of $ 750 and this debt should not be disputed by either the debtor or the creditor in order for the debtor to be eligible to file for bankruptcy.
There are combinations of causes that can lead to bankruptcy including poor decision making, people failing to establish and set up funds for contingencies and not insuring themselves and other belongings. Normally bankruptcy is happens over a period of time when a person’s assets keep dwindling and the final blow comes when a major event such as medical bills, divorce etc happens and a person is unable to pay off his debts anymore. The best way to protect oneself from bankruptcy is to always have enough money in the bank to provide for a couple of months and to also create cover for unforeseen situations or contingencies.
Bankruptcy is either filed by the debtor himself in order to clear his debts or by the Government. If an individual has bad debt problems then the only alternative to filing for bankruptcy is to enlist the services of a debt management company which will then formulate a plan which helps the person to pay off his debts in a systematic matter and also allows a person to live life in a reasonable way. Bankruptcy is not always the best way to solve a debt problem as there is a number of permanent problems and effects that bankruptcy can bring with it.
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Bankruptcy in and out
By | December 15, 2007
Bankruptcy is a problem that affects many people in the world particularly in the U.S and it refers to a legal declaration of the inability of a person to pay off his creditors. Involuntary bankruptcy is much like involuntary winding up and is when a creditor files a suit against a debtor in an attempt to recover some of his money while voluntary bankruptcy is when the debtor himself files due to his inability to pay off sums due by him.
The purpose of bankruptcy is to allow the debtor to pay off loans through assets or any means available to him and then to make a fresh start.
A liquidation bankruptcy is when a debtor allows his estate to be administered in order to pay off debts while a reorganization bankruptcy is a situation where a debtor’s assets are reorganized and the debt is paid off through his earning instead. During bankruptcy proceedings a debtor is normally protected against non-bankruptcy legal action through an injunction or stay.
One of the major causes of bankruptcy is credit cards where people spend beyond their limits. This problem is especially common among Americans wherein people have more credit cards than they can afford to have. Many people also take out loans to finance their day to day expenditure instead of just living within their means.
Bankruptcy can have severe effects on a person’s future as it is a financial black mark of sorts. It disqualifies a person from taking a prime loan and relegates him to the sub-prime loan market. There are always questions raised about his ability to pay off other loans and very often loans are not advanced to him.
More often than not bankruptcy is a situation which can be avoided if a person lives within his means.
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