Tag: rebuilding credit after bankruptcy

Bankruptcy Law, Credit, Credit Score

The Impact Bankruptcy Has On Applying for Loans and Credit Cards

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While not all bankruptcies cause a huge drop in a person’s credit score, it is possible a person’s score could rise after bankruptcy.

A consumer’s FICO score is one of the biggest determining factors in whether a person will receive approval for credit or financing. The FICO score will also help determine the interest rate a person receives on a credit card. Some lenders are willing to accept credit applications even with lower scores. However, if this happens, it is unlikely that the terms of the credit application will be favorable to the consumer.

The bankruptcy filing may or may not have a significant impact on the consumer’s credit score, depending on what the score was before the filing. The consumer’s payment history makes up approximately 35% of the person’s credit score. If the person had a poor payment history to begin with, the bankruptcy filing will not have as much of a noticeable impact on the score. If the person had an excellent credit score previously, the effect the bankruptcy will have on the credit score will be more significant.

Consumer Bankruptcy, Credit, Credit Score

How to Repair Credit History After Filing for Bankruptcy

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Once a consumer has filed for bankruptcy, he or she will almost certainly notice a drop in their credit score. This drop is to be expected, and while it does temporarily affect a person’s credit, it is by no means permanent. In fact, with good financial habits a consumer can rebuild his or her credit to better than it was before filing for bankruptcy.

Following the closure of the bankruptcy case, certain steps can be taken to bring that credit score back to where it once was or even higher.

Bankruptcy Law, Credit Score

Tips for Rebuilding Credit After Bankruptcy

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Sometimes people hold off filing for bankruptcy for fear of what it will do to their credit and financial future. While filing for bankruptcy will impact a person’s credit score, this damage is not irreparable. In fact, with good financial habits a consumer can rebuild his or her credit to better than it was before filing for bankruptcy. 

After the consumer’s debts are discharged at the end of a bankruptcy case, it is recommended that the consumer monitor his or her credit report to ensure that any outstanding or past-due balances are reported as zero if they have been successfully discharged. If any discrepancies are found, these errors should be reported right away to the credit bureaus via a formal dispute.  

Bankruptcy Law, Credit Score

Tips for Rebuilding Credit After Bankruptcy

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Filing for bankruptcy allows people to get a fresh start financially and erase past debts, but a legitimate concern many consumers have is the effect it will have on their credit score and their ability to take out credit, again.

One of the biggest misconceptions about filing for bankruptcy is that it will ruin your credit score and your financial future.  To the contrary, after filing for bankruptcy you can begin restoring your credit right away.

Bankruptcy Law, Credit Score

Tips to Help Seniors Bounce Back from a Bankruptcy Filing

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With the rising costs of health care and inflation, it is not uncommon for seniors to seek bankruptcy relief. Although bankruptcy can remain on a filer’s credit report for seven to 10 years, depending on the type of bankruptcy, there are certain steps seniors can take to boost their credit score during this period.

Prepare a Budget

One of the most important steps a senior can take after filing for bankruptcy is to prepare a budget. Many agencies, including the AARP Foundation, will work with the senior to prepare one. Most seniors live on fixed incomes, which leave very little room for unexpected expenses, such as large medical bills or expensive home repairs. However, if senior consumers can put together a plan that gives them leeway to pay for the unexpected, this budget will help them prevent falling into the same financial situation, again.

Bankruptcy Law

Important Factors to Keep in Mind When Filing for Bankruptcy

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When filing for bankruptcy, certain factors should be kept in mind, including the type of bankruptcy being filed, property exemptions available to the filer, and the various laws and legal regulations that accompany filing for bankruptcy.

The type of bankruptcy being filed.

The most common types of consumer bankruptcy are Chapter 7 and Chapter 13 bankruptcies. A Chapter 7 bankruptcy allows filers to receive a total discharge of their qualifying debts and is an option used mostly by filers whose debts are particularly high compared to their level of income. To file for Chapter 7 bankruptcy, filers must qualify under the bankruptcy means test. Chapter 13 bankruptcy allows the consumer to enter a repayment plan to pay all or part of his or her debts over the course of three to five years.

Bankruptcy Law, Credit

Tips for Renting an Apartment After Bankruptcy

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Filing for bankruptcy gives individuals a financial fresh start, relieving the stress of debt and collection calls.  However, declaring bankruptcy can add some additional obstacles to the apartment- hunting process, but not to worry: You can rent an apartment after declaring bankruptcy.  It comes down to the application process, and we have some important tips for you.

Honesty Is the Best Policy.

It can be tempting to want to hide the fact that you recently filed for bankruptcy, but unless the apartment or rental home is a property that does not require a credit check for rental applications, this fact will be discovered quickly. The last thing an applicant wants is for the landlord to find this out after the fact before the renter has any chance to explain the situation. If a bankruptcy is on the individual’s history, it is best to be upfront from the beginning. Honesty is the best policy.

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

How to Improve Your Credit After Bankruptcy

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The decision to file for bankruptcy is a tough one to make, but it is often the first step in gaining control of your financial future. A common concern people have when filing for bankruptcy is the effect it will leave on their credit score and their ability to access credit, again. While bankruptcy does affect your credit score, it is sometimes the last resort to rebuild your credit and your life.

In fact, it is oftentimes easier to reestablish your credit after filing for bankruptcy, because you are essentially given a “fresh start.”  Here are some quick tips to help rebuild your credit after filing for bankruptcy.

  1. Pay Your Bills on Time. Take full advantage of your financial fresh start. Make consistent and timely payments on all of your bills and any remaining debts moving forward, like your mortgage and car payment. These consistent payments over time will help improve your credit score and re-establish your credit.
  2. Monitor your Credit Report. Make sure and check your reports every few months for errors. Confirm that any negative marks (i.e. – your discharged debts) have been removed.
  3. Use a Secured Credit Card. With a secured credit card, you deposit with the lender an amount equal or nearly equal to the maximum credit line on the card. Unlike with a debit card, your payment history for a secured card is reported to the credit reporting agencies.
  4. Budget. Create a realistic budget for yourself. Review your finances several times per week to ensure you are sticking to your budget.
  5. Set up Auto-pay. Set up automatic payments for your cable, Internet and phone bills, so you do not miss your payment due date. Again, watch your finances closely so that you know when money will be coming out of your account.

There are proven ways to rebuild your credit score after bankruptcy, and our clients are proof!

My credit score said on all three reports 775, I couldn’t believe that I had such a great score before 10 years. Tim for me was the best move I have made for my situation. I have no regrets; I am glad the past is the past. – Bill T.

Hi Tim- I just wanted to send a quick note and thank you and your team for handling my bankruptcy case.  It is only a month or two after discharge, and my credit scores are already in the upper 600’s. – C.S.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Source:

https://www.thebalance.com/how-to-improve-your-credit-score-after-bankruptcy-316108

 

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Tips for Buying a Home Post Bankruptcy

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Many people assume that filing for bankruptcy means that they will never be able to qualify for a home loan or take out credit again.  This is one of the many bankruptcy myths out there. The following steps can help you achieve the goal of purchasing a home post-bankruptcy.

  1. Review Your Financial Situation

After receiving your fresh start from bankruptcy, you should review your financial situation. Ensure that all of the debts that would have qualified for discharge in a bankruptcy case have, in fact, been discharged. It also helps to get a clear picture of where you are financially by reviewing your credit report.  Most financial experts recommend you review your credit report every year to ensure that no mistakes exist on the report and to ensure that progress is being made in rebuilding your credit.

  1. Establish a Budget

Not only is it helpful to get a good idea of your financial situation by reviewing your credit report and keeping tabs on your progress in rebuilding your credit, it is also important to establish and stick to a budget. Review your monthly household expenses, as well as your monthly income. Lay out any upcoming annual expenses, including taxes or vehicle registration, and make sure enough money is available to pay for all of these necessary expenses. If any additional funds are available after all needed expenses are met, use this money to help build up a savings for a down payment, as well as unexpected emergency expenses. Stick to this budget throughout the year, as much as possible to help build up savings for a down payment on a home.

One practical way to grow your savings is to follow the adage of paying yourself first. When creating a budget, make sure that putting money into savings is a priority by doing it before you use any extra money on unnecessary expenses. While the more you are able to put away into savings is better, also be realistic in how much you set aside for savings. Do not stretch yourself too thin to the point where you have nothing left for any other costs and expenditures.

  1. Rebuild Your Credit

Building up savings is important, but it is equally important to rebuild your credit after bankruptcy. One important tool used by bankruptcy filers to rebuild credit is a secured credit card. These types of cards carry lower spending limits and higher interest rates but using a secured credit card for a short period of time can help rebuild credit. After a set period of time, you can begin using a conventional credit card, so long as the balance is kept low and paid in full every month. It also helps to continue paying all bills on time and not missing payments, which will improve your credit score over time.

  1. Formulate a Plan

You should go into the home purchasing process with a plan in mind. Calculate what type of down payment you can afford, but also keep in mind what type of monthly mortgage payment your budget can handle. Financial experts recommend that you not spend more than 28 percent of your income on housing costs.  Also ensure that your budget allows for additional expenses, such as regular maintenance and costs that come along with home ownership. If you have a house you are interested in, make sure you schedule a thorough inspection to ensure that no additional, unidentified problems come along with the purchase.

  1. Get Organized

Before applying for a mortgage, it is recommended that you get yourself organized and prepared with all of the financial information that will be required for a mortgage application. If you have just completed a bankruptcy case, odds are you are familiar with compiling important financial documentation, including paystubs, tax returns, list of assets and other financial documentation.  Common documentation that is required includes bank, credit card and other loan statements, tax records, insurance documents, employment records, paystubs, and investment records. If you have recently gone through a bankruptcy, you may also need to provide legal documentation, such as your bankruptcy petition.

  1. Research Your Mortgage Options

It pays to do the research to determine the best available lending options. Conventional mortgages are available through private lenders, mortgage companies, commercial banks and credit unions. These types of mortgages tend to be more rigid in their criteria. The Federal Housing Administration (FHA) also offers loans that are backed by the government. These loans are a little more flexible in their criteria but come with other restrictions on the person’s ability to flip the property or rent it out later. FHA loans, however, are beneficial for first-time or lower-income homeowners.  Be sure to research the different interest rate options available before signing on the dotted line. Financing can be done through a fixed-rate mortgage, which locks the purchaser into an interest rate at the time he or she signs loan documents, or an adjustable rate mortgage, which can mean rates can fluctuate with the market.

How smoothly purchasing a home after bankruptcy goes can depend heavily on the type of consumer bankruptcy that was filed, whether it be Chapter 7 or Chapter 13 bankruptcy, and the type of loan being sought. Mortgage lenders have different “seasoning periods” that determine when someone is ready to receive a mortgage following a bankruptcy or foreclosure. For a Chapter 7 bankruptcy, the period usually is four-years after discharge for a conventional mortgage or two years for a VA or FHA loan. However, for a Chapter 13 bankruptcy, a borrower may be able to get a conventional mortgage just two years after receiving a discharge or even less than two years if the borrower is seeking a VA or FHA mortgage.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Related Resources:

https://blog.credit.com/2017/11/5-steps-to-buying-a-home-after-bankruptcy-115998/

https://blog.credit.com/2014/10/how-soon-can-i-buy-a-house-after-bankruptcy-or-foreclosure-98939/

 

 

Bankruptcy Law, Debt Relief

6 Tips to Get Back on Your Feet After Bankruptcy

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Chapter 7 bankruptcy allows you to get a fresh start financially and erase past debts, but a legitimate concern people have is the effects it will have on their credit score and their ability to take out credit again. One of the biggest misconceptions about filing for bankruptcy is that it will ruin your credit score and your financial future. To the contrary, after filing for bankruptcy you can begin restoring your credit immediately.

It is possible to rebuild your credit after bankruptcy, so long as you exercise discipline and stay on track financially.  The following tips will help you get back on your feet and stay there after filing for bankruptcy.

  1. Put Together a Budget.

Budgeting is not fun for most people, but it is necessary. Preparing a budget and keeping to it is an excellent way to track how much money is coming in and how it is being spent. If you are overspending beyond your means, a budget will be able to track this issue and help keep you in line. Many people have success with online programs for budgeting, while others use a simple spreadsheet. To start, enter in how much income is received on a monthly basis. Next, enter in all fixed expenses, including mortgage payments or rent, utility bills, insurance and other monthly expenses. The first step is to make sure that your income covers all of these expenses. Then put together a list of other expenses that are more discretionary. These discretionary expenses are often where most people overspend. If the budget does not cover these discretionary expenses, then do not spend on those items.

  1. Pay Bills on Time.

After bankruptcy, you can immediately begin rebuilding your credit – but one surefire way to not achieve this goal is by not paying your bills on time. In fact, paying bills on time can account for approximately 35 percent of your credit score. Anytime someone is late on a payment, this signals to lenders that the consumer is not good with his or her money and is thus a lending risk. Once a budget is put together, stick to that budget and make sure all bills are paid on time and in full. If someone struggles with making payments on time, auto-pay could be a good option to ensure that payments are taken out immediately and are not late.

  1. Pay Discretionary Expenses with Cash.

If you wish to spend on extra expenses, such as entertainment or clothing, and worry about keeping to a strict budget, one method that can keep you in line is to only spend using cash on hand. Being restricted to what you have in your wallet, makes you prioritize what you spend. Once the money is gone, the spending stops. Make sure that a credit card is not also in your wallet so that the temptation is not there for when the money runs out.

  1. Use a Secured Credit Card to Rebuild Credit.

Credit cards often bring people into a bad financial situation, but they can also be extremely helpful, especially for when it comes to building up credit. A secured credit card can be an excellent resource for someone with poor credit to help rebuild their credit. Secured cards often require the borrower to put down an amount of money to secure the card, limiting that person on how much money he or she can spend on the card based on how much cash was deposited as collateral. Secured cards are not meant to be used for the long-term but rather for temporary purposes until that person rebuilds his or her credit score enough to take out a regular credit card.

  1. Report Positive Accounts to Your Credit History.

To further help a consumer’s chances of being approved later for a line of credit or mortgage, it can help to add positive accounts to your credit history. Certain expenses, such as utility bills, can be added through major credit reporting companies, such as TransUnion, Equifax and Experian. By adding these positive accounts to the person’s credit history, he or she can demonstrate positive financial behavior through regular, on-time payments on these bills.

  1. Be Wary of Scams.

One very important thing to keep in mind is the fact that not everyone out there has your best interest in mind- particularly if they know you are trying to rebuild your credit. If a company is requiring you pay an upfront fee before they will help you with your credit score, this is a huge red flag that a scam is involved.

If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

Related Resources:

https://www.bankrate.com/personal-finance/debt/bankruptcy-ways-to-bounce-back/