Credit Card Tips after Bankruptcy

Posted on December 26, 2012 by Staff Writer

A Chapter 7 bankruptcy will stay on a credit report for up to 10 years. A Chapter 13 bankruptcy will stay on a credit report for up to 7 years. Everyone who applies for a credit card, car loan, or mortgage, gets their credit report reviewed. Filing for bankruptcy can make you a poor candidate for bowing money or getting credit, but there are ways to rebuild credit.

While it always seems that credit cards are the reason that people declare bankruptcy, they are one easy way to rebuild credit. There are credit cards which are termed secured, which can be used by those who filed for bankruptcy. It is termed secured because the user secures their debt by paying a security deposit to the credit card company.

Before you apply for this type of credit card, do some research and get some counseling. Make sure that the card reports to all three credit bureaus. This will allow your timely payments to affect you credit scores as much as possible. Once you have a new credit card, keep the balance around 10% to 15%. Another common mistake is closing credit cards. If you close a card, it reduces the amount of credit you have available. If you can’t stop using your cards after the balance is paid, then just cut the card in half.

Bankruptcy can be an important tool to secure your financial future. If you have any question about rebuilding your credit or life after bankruptcy, reach out to a professional. Contact a helpful bankruptcy attorney in Tempe who can guide you back into a new financial future.

Credit Card Debt Rises, Delinquencies Fall

Posted on October 20, 2012 by Staff Writer

Credit card debt is on the rise for the American consumer, which could be bad news for the number of bankruptcies as the holiday shopping season approaches. According to the American Banking Association Banking Journal, “average credit card debt per borrower increased from $4,699 in the second quarter of 2011 to $4,971 in the quarter that just ended—a rise approaching 6 percent.” According to TransUnion, this average is, however, still low compared to the $5,719 average that peaked in the second quarter of 2009.

The news isn’t all bad, however. At the same time that debt reached its relative new high, “the second quarter saw the national credit card delinquency rate fall to 0.63 percent, down ten percentage points from the first quarter.” This, according to TransUnion, is the lowest level since the second quarter of last year, and last year was the lowest level of delinquencies since 1994.

This could be indicative either of the fact that American consumers have begun to learn to spend within their means, or that they have adjusted to paying higher rates of credit card debt as a percentage of monthly expenditures. Either of these could be one reason that the number of bankruptcies in Arizona has continued to drop recently. According to CreditCards.com, Arizona rose six spots from number 21 to 15 for the listing of bankruptcies per capita. Better management of credit card debt—including a reduction in number of delinquencies that follows the nationwide trend—would have a direct impact on the number of bankruptcies in a state.

If you or someone you know is considering bankruptcy, as a result of credit card debt or unmanageable delinquencies, don’t go through it alone. Contact an experienced Arizona state bankruptcy attorney today.

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Rebuilding Your Credit Following Bankruptcy

Posted on October 14, 2012 by Staff Writer

One common concern of many consumers is that if they file for bankruptcy proceedings, whether it be under Chapter 7 or Chapter 13, that there will be an irrevocable mark on their credit reports from which they will never recover. The reality is that filing for bankruptcy will undoubtedly lower your credit score significantly. A lower credit score will make it more difficult for you to qualify for credit, and may subject you to higher interest rates when you do qualify for credit. However, the damage to your credit score will not last forever, and you can easily make strides to rebuild your credit following your bankruptcy discharge.

After your bankruptcy is complete, you are likely to be able to get a credit card with at least a small credit limit. By using that card regularly and making timely payments each month, you can slowly begin to rebuild your creditworthiness. Likewise, you are likely to qualify for a vehicle loan fairly quickly following your bankruptcy. Although interest rates on these loans can be high, making regular, on-time payments also can help rebuild your credit score.

Fortunately, as reported in a recent Bloomberg article, federal law is increasingly attempting to protect consumers by ensuring that their credit scores are correct and that there is easy access to their credit reports on a routine basis. For instance, under the Fair Credit Reporting Act, you can access a free copy of your credit report from each of the three major credit reporting companies each year. Furthermore, starting October 1, 2012, the Consumer Financial Protection Bureau, as created by the Dodd-Frank law of 2010, will begin supervision of the records and practices of companies in the business of credit-reporting. This new supervision is designed to ensure that consumers and lenders receive the same credit scores and information from credit-reporting agencies.

In many cases, bankruptcy is the best option to stopping creditor harassment and dealing with overwhelming amounts of debts. Fortunately, while bankruptcy may temporarily lower your credit score, with time and hard work, you can successfully rebuild your credit score. Contact your experienced Las Vegas bankruptcy attorney today for more information about the effects of bankruptcy on your credit score, and to get answers about whether bankruptcy relief is right for you.

A General Chapter 7 Bankruptcy Process

Posted on September 6, 2012 by Staff Writer

A Chapter 7 bankruptcy is a particular kind of bankruptcy which tries to eliminate debts by selling off assets like cars, clothing and the like. Every state has different exceptions for assets which cannot be used to pay off debts, as a starting point when considering filing for a Chapter 7 bankruptcy. It will also be beneficial to know what the process of bankruptcy will entail.

The first step is to fill out a petition for bankruptcy fully and completely. You will need a clear record of all creditors owed, all expenses and incomes, including all personal assets and the exceptions appropriate to the assets you hold. This finished petition must accompany a certificate showing the completion of a debt counseling program. Essentially, this certification teaches alternatives to filing for bankruptcy. It is a requirement of the federal bankruptcy law, which allows you to file your petition for bankruptcy. Verify that the certificate you are seeking is from an authorized service, otherwise you will waste time and money.

At that point, there will be notification from the bankruptcy trustee, who is the court-appointed official overseeing your bankruptcy. This notification will ask for you to supply additional documentation such as automobile titles, bank account statements, and tax returns. There will also be a notice that will require your attendance at a 341 meeting. A 341 meeting will require you to truthfully answer questions posed by your trustee and your creditors. You will need to obtain a second certificate to verify that you received credit counseling. This certificate must be filed with the clerk’s office within 45 days of the 341 hearing.

If everything is done on time, then the petition will be filed within 3 months from the 341 meeting for your debts to be discharged . This does not finalize your filing because the trustee will have to completely analyze the bankruptcy information. At that point, the trustee will make the final determination on your case. If you have looked into your other options, but bankruptcy seems like your only option, please contact a qualified Phoenix bankruptcy attorney today.

Delinquent Medical Debt Leads to Increase in Bankruptcy Filings

Posted on August 8, 2012 by Staff Writer

Roughly 20 percent of those seeking financial counseling required for bankruptcy filing this year and last cited medical debt as the primary cause of their decision to seek bankruptcy protection, according to CredAbility, an Atlanta-based nonprofit credit counseling agency that serves clients nationally. The analysis included more than 47,000 clients for the first half of this year, and more than 100,000 from last year.

With unemployment persistently high, more people have lost health coverage along with their jobs. People who have lost their jobs, but are continuing their group coverage under the federal law known as COBRA, may find it difficult to make the higher premium payments and are slipping into default on premiums and medical bills at an increasing rate.

Health costs are escalating for employed people as well in the form of higher premiums and deductibles. More health plans are offering lower monthly premiums in exchange for higher deductibles, but that means people find themselves on the hook for more out-of-pocket costs if they get sick.

For healthcare providers trying to collect on delinquent debt, this means acting quickly to begin the collections process is imperative. With the good communication with the debtor, there are numerous alternatives to filing bankruptcy where the debtor can make arrangements to protect their creditworthiness, and the healthcare providers collect a higher percentage of return on delinquent debt and avoid losing the receivable to bankruptcy.

But if bankruptcy is the right option for you it is imperative to choose the right Professional Bankruptcy Firm that can guide you through the complex nuances of bankruptcy filing. Schedule a free consultation with an experienced bankruptcy lawyer to see when you should file. Keep the assets you need to start over, don’t use them to pay creditors when you don’t have to. Contact a Phoenix Bankruptcy Attorney Today!

Bankruptcy Filings Up in Phoenix

Posted on July 31, 2012 by Staff Writer

The month of June saw an increase of bankruptcy filings in the Phoenix metropolitan area, to the highest point in the past nine months. Individual, as well as business, filings have increased steadily in the past four months. The number of filings on the state level line up with the same trend, with May numbers rising steadily from April figures.

The bulk of the filings were for Chapter 7 bankruptcy, in which a business or personal assets (only those which are non-exempt) are liquidated to pay debts and creditors, with debt forgiveness after the proceeds are exhausted. The rest of the filings were primarily Chapter 13, calling for a reorganization of the debtor’s finances to structure repayments to creditors.

Situations that contribute to bankruptcy filings are unemployment and underemployment without cessation. Another issue that impacts figures is increases in foreclosures. Many homeowners file for bankruptcy after receiving notice of impending foreclosure on their homes. The number of foreclosures is directly tied to the number of new bankruptcy filings: as foreclosure numbers increase, bankruptcy filings also increase within one to two months afterwards.

The good news indicated by these numbers is that bankruptcy filings for the Phoenix metropolitan area have leveled off, with the past sixteen months coming in at lower rates than the same months in 2010 and 2011.

Becoming faced with job loss or an inability to secure employment that pays what your financial circumstances require is not an easy situation. For legal and emotional support through this difficult time, contact an empathetic Arizona attorney who specializes in bankruptcy. This expert can assist you in navigating through what can otherwise be a stressful, humiliating and almost impossible turn of events, and can assist with recuperating financially afterward the case is resolved.

Bankruptcy Not Only for the Average Joe

Posted on July 30, 2012 by Staff Writer

After the annual National Football League’s draft season, it is reported that an estimated 200 college athletes will secure contracts worth millions of dollars. Yet, in as little as five or ten years, these same athletes may become bankrupt.

This phenomenon is not limited to any specific group of athletes, but basketball and football players seem to file bankruptcy in the highest numbers. Sports Illustrated set forth estimated numbers (in 2009) of 78% of NFL players and 60% of NBA players were experiencing financial strain between two (NFL players) and five (NBA players) years of retiring. Exactly how does this happen?

Although there are several reasons for this occurrence, one of the contributing factors seems to be a result of unsound financial advice. The new millionaires become magnets for so called “advisors” who may not actually be experts in handing financial matters. Also, marriages and extramarital affairs contribute to huge income losses for athletes.

Athletes receive their pay early in their careers and there is a marked lack of the same cash flow after retirement or as the athlete ages. Unwise money management from the beginning can create bankruptcy in later times.

The average person who files bankruptcy may not have the same status of financial high points as these professional athletes, but they face financial mishaps in a similar manner. The Supreme Court set forth the definition that bankruptcy “gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.” As such, bankruptcy is an available tool to help alleviate financial burdens and learn from past missteps to plan for a successful future. Contact a compassionate Arizona bankruptcy lawyer today to begin your new life.

How long will it take to repair my credit after Bankruptcy?

Posted on July 11, 2012 by Staff Writer

What about my credit rating? How long will it take to repair my credit? These are logical questions, but before we get to o concerned about how to rebuild credit, let’s consider if it is important to us. A credit rating is usually the cause of credit problems. It is relatively easy to develop large credit lines that are capable of putting us into debt we cannot afford. The banks should be responsible. They are the ones that gave us the money when they should have known we could not repay it. They didn’t check because they don’t care about us. Try to remember this when they call for payment. Not repaying a debt to a multi-billion dollar bank that should have known better had they cared about anything other than money should not make you feel bad or ashamed. They are the ones that created your problem.

However, if you decide you would like credit again, the only thing you should need it for is unsecured debt. If you have a home and a car I am not sure what good a credit rating will do. You will have all of the money you didn’t pay every month to the big banks and credit cards to buy things in cash. That way, you will never again have to worry about a bomb going off in your life when you open a credit card statement. Credit is a tool of the banks that get us in trouble in the first place. Don’t do it! At least not again.

THE CRAZY THINGS CREDITORS WILL SAY TO SCARE YOU

Posted on May 22, 2012 by Staff Writer

There are many things a creditor will say to try to “scare” you into paying any amount when a debt is owed. What many people don’t know is that a lot of the scare tactics used are false and empty threats. The following is a list of some of the things a creditor will tell you to collect on a debt.

“I am going to have you arrested if you don’t pay” You cannot be arrested/ go to jail for not paying a creditor.

“I’m going to garnish your wages” Although wage garnishment is a possibility, any crediting company must file a judgment against you through the courts in order to do so, This does not happen overnight and is a legal process that takes time.

“I am going to contact your family members to collect on the debt” The creditor can only discuss your situation with you. This is used often to embarrass you into making payment.

“Im going to contact your payroll department/coworkers/boss to discuss your debt” or “I am going to contact your family members to collect on the debt” Legally, A creditor is not allowed to discuss your debt or financial situation with anyone other than you.

“We are going to seize your bank account” Again any type of “seizing” of funds must be done through a legal process.

“We don’t work with settlement companies and you cannot file bankruptcy on this debt” All major creditors will work with a settlement company and you can include any dischargeable funds through bankruptcy. They want to scare you into working with them directly so they can get the most money out of it.

“If you file bankruptcy you will lose all of your belongings/ they will take everything you own”

It is best to speak with an attorney and only the attorney about how bankruptcy will affect your particular situation. In most cases you are able to keep your home and vehicle among other possessions through bankruptcy.

Creditors will say anything in order to get paid. When facing a debt collection agency it is best to be prepared and know what is true when speaking with a creditor.

The Credit Counseling Requirement in Bankruptcy

Posted on March 20, 2012 by Staff Writer

Under the new Bankruptcy Law of 2005, which became effective in October of 2005, it is now necessary for all persons filing a Chapter 7 or Chapter 13 Bankruptcy Petition to obtain what are called “Counseling Certificates”.

The specifics of the requirement are that everyone filing a Chapter 7 or Chapter 13 Bankruptcy Petition must obtain one Counseling Certificate before and one Counseling Certificate after the Bankruptcy Petition is filed.

The reason for the new law pertaining to the Counseling Certificates is to help people learn how to better budget their finances and learn more about options other than bankruptcy.

The Counseling Certificates must be obtained from an accredited counseling organization.

It usually takes about 45-90 minutes to complete the first Counseling Certificate which can be done in person, by phone, or onlne.

Normally a fee is charged for the Certificates unless the person cannot afford the cost. If a person cannot afford the cost, a waiver can be obtained.

Remember, once the approved Counseling Certificate is obtained, it is valid for 180 days. If a person fails to file a petition within the 180 of obtaining the Certificate then the Certificate will expire and a new one will have to be obtained.

It is also necessary to obtain a second Counseling Certificate within 45 days of having the creditors’s hearing or what is called the “341 Hearing”.

The 341 Hearing normally takes place about 30 days after filing the Bankruptcy Petition.

The second or Post-Petition Filing Certificate provides the person with supplemental information that was learned from the Pre-Petition Filing Certificate and takes a little more time to complete compared to the Pre-Petition Filing Certificate.

From what clients have told me, I have learned that what is learned through the Counseling courses is valuable, usable and practical information. If you have questions contact an Arizona Bankruptcy Attorney today.