Tag: credit after bankruptcy

Consumer Bankruptcy

How to Get a Home Loan After Bankruptcy

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Filing for bankruptcy is not an easy decision. But while filing for bankruptcy can be emotionally challenging, it is a relatively common option to choose. Annual bankruptcy filings totaled 452,990 in 2023, according to a report from the Administrative Office of the U.S. Courts — an increase of nearly 17% compared to 2022, when 387,721 bankruptcy cases were filed.

Oftentimes, it is easier to reestablish credit after filing bankruptcy, because you are essentially given a “clean slate.”

Here are 5 Tips for Getting a Home Equity Loan After Bankruptcy.

  • Timing is everything. Depending on the type of bankruptcy filed, it is crucial to recognize that lenders typically become more willing to work with you as time passes. Be proactive about increasing your credit score after bankruptcy and lenders will view your financial situation more favorably.
  • Rebuild your credit. After filing for bankruptcy, obtain a copy of your credit report to confirm that everything is accurate. Rebuilding your credit should be a top priority. That means paying your bills on time, reducing outstanding debts and using a secured credit card.
  • Shop around. Home equity lenders have different requirements when it comes to lending ‘post-bankruptcy.’ It is in your best interest to take the time to research those lenders who offer terms that are most favorable to you. Compare interest rates, fees, terms and conditions of the loans.
  • Consider a co-signer. A co-signer with a strong credit history can significantly increase your chances of being approved for a home equity loan following bankruptcy. When you add a co-signer to the loan you are essentially vouching that they will repay the loan if you are unable. However, it is important to recognize that co-signers are equally responsible for the loan, and any default can negatively impact that person’s credit.
  • Highlight positive financial changes. When applying for a home loan after bankruptcy, it can be helpful to provide the lender with evidence of positive financial changes you have made since filing.

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:

6 tips for getting a home equity loan after bankruptcy – CBS News

Bankruptcy Law, Debt Relief

How to Bounce Back After Bankruptcy

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There are many misconceptions surrounding the amount of time it takes to rebuild credit and bounce back after bankruptcy.  A recent study by LendingTree, reveals that individuals who file for bankruptcy can improve their credit score sooner than they think.  In fact, more than 40 percent of consumers end up having a credit score of 640 one year after filing for bankruptcy. Approximately 65 percent of filers see the same score, at least, three years after the bankruptcy case is over.

We have some important tips to help you bounce back and stay on track after filing for bankruptcy.

Put Together a Bankruptcy File.

After the bankruptcy case is complete, chances are, the filer has a lot of paperwork. It can be very tempting to put it all away, never to look at it again, but it is important to keep all these documents handy in the event they are needed in the future. If a consumer wants to purchase a car or a home, he or she may need to produce the bankruptcy paperwork before receiving financing. It helps to stay organized and put together a file for your bankruptcy paperwork.

Look Back at the Past and Strategize for the Future.

Before moving forward, it helps if the consumer gets a clear understanding of how he or she got in the bad financial situation to begin with, whether it be due to a job loss, divorce, an illness, overspending, or just bad financial luck. It helps to take a moment and strategize how the consumer wants to move forward.

Develop a Good Relationship with a Bank.

Even if the possibility is in the distant future, if the consumer wants to qualify for a loan or make a big purchase, like a home, it is important he or she has a personal relationship with a good bank. Many times, it helps to tell them a bit about how the person ended up in bankruptcy and give them a human face to the numbers on the account.

Be Cautious in the Future.

Once a consumer is out of debt, he or she will likely receive communications from lenders offering financing for various purchases. They will see that the person no longer is in debt and will not be able to declare bankruptcy again for many years, making that person an easy target. The kind of lenders who reach out to consumers right after bankruptcy, however, are not always the most reputable lenders. Be very cautious when considering these offers.

Review Your Credit Report.

After filing for bankruptcy, it is important to periodically review your credit report. A credit report can be reviewed annually for free, and it shows not only the progress being made in rebuilding the consumer’s credit score but also any false or old charges that should no longer be on the report.

Think Before Borrowing.

It can be tempting to borrow again, believing that the consumer can handle a payment when, in fact, he or she cannot. Make sure that the payments are feasible by building a budget before applying for another loan. Also keep in mind that a credit score takes a hit after applying for a new loan, and this could quickly destroy any progress made on rebuilding the credit score.

Work on Rebuilding Your Credit.

One of the best ways to get credit back to where it once was is to pay all bills on time every month. Missing a payment is an easy way to hurt your credit score.  Using a secured credit card after filing for bankruptcy is also an excellent way to improve your credit score, as the payment history is reported to the credit bureaus. Put together a budget, see what your monthly expenses are, and stick to that budget. Make sure you have enough income every month to meet your monthly obligations, and set up automatic payments, if needed, to make sure no bills are missed.

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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.

 

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Myths about bankruptcy and your credit score debunked

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There are many misconceptions surrounding the amount of time it takes to rebuild your credit after bankruptcy.  We are clearing up some of the common misconceptions about how bankruptcy affects your credit score.

Myth #1: All bankruptcy information stays on your credit report for ten years.

The Truth: Only the public record of a Chapter 7 bankruptcy lasts for ten years.   All other bankruptcy references remain on your credit report for seven years, including:  Line items stating “account included in bankruptcy;” Third-party collection debts, judgments and tax liens discharged in bankruptcy and Chapter 13 public record items.  Once these items begin to disappear, you will see a bigger boost to your credit score.

Myth #2: You will have poor credit as long as the bankruptcy information stays on your credit report.

The Truth: This is one of the biggest misconceptions and one that our clients can tell you is a complete myth.

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.  I’ve sent a screenshot in the event that you would like to use this to show prospective clients. – C.S.

You can begin to build your credit back with smart credit management.  Within a few years, you can obtain a “good” credit score ranging from 700 – 749 by doing the following:

  • Adding new credit, such as secured credit cards or small installment loans, to offset the negative information on your credit report;
  • Making on-time payments for all debt, new and old;
  • Keeping your credit card balances under 30% utilization.

Myth #3: Bankruptcy affects the credit of all filers equally, regardless of the amount of debt.

The Truth: Your credit score will factor in details such as the amount of debt discharged and the proportion of negative to positive accounts on your credit report. If you have a low amount of debt and only a few accounts included in your bankruptcy, your credit score will be higher than someone with a more severe bankruptcy case.

Myth #4: You cannot get a credit card or loan after filing for bankruptcy.

The Truth: Credit cards are one of the best ways to begin rebuilding your credit and you will be surprised how quickly offers for them will appear in your mailbox after filing for bankruptcy.  Secured credit cards, which require an upfront security deposit, allow you to spend and build credit easily and safely.

Myth #5: Bankruptcy will ruin your credit forever.

The Truth: Bankruptcy will damage your credit in the short term, but practicing good financial habits, can rebuild your credit to be stronger than ever. A report from the Federal Reserve Bank of Philadelphia showed that those who filed for Chapter 7 bankruptcy in 2010 had an average credit score of 538.2 on Equifax’s scale of 280 to 850. But the average score jumped to 620 by the time those bankruptcies were finalized, approximately six to eight months later. There are many ways to rebuild your credit after filing for bankruptcy. There are certain limitations you will face after filing, but taking advantage of the right financial tools can go a long way in helping you get back on the right path for your financial future.

If you have any 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.

 

Bankruptcy Law, Credit, Debt Relief, Timothy Kingcade Posts

Tips for Applying for a Credit Card after Bankruptcy

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Filing for bankruptcy doesn’t mean you are shut off from new credit. Creditors look at multiple factors when determining credit eligibility. For example, your income and the time since you received your bankruptcy discharge.

If you are looking to rebuild your credit post-bankruptcy, a secured credit card is a good place to start. Secured credit cards are designed specifically for people trying to improve their credit. They are different from normal credit cards in that they require you to put down a security deposit, usually a few hundred dollars. Your deposit typically equals your credit line:  For example, if you make a $400 deposit, you will have a $400 line of credit. The deposit protects the issuer if you do not make your payments. That makes secured cards a relatively safe bet for lenders extending credit lines to people with lower credit scores.

Those individuals who file for bankruptcy may receive an influx of credit card offers soon after. Proceed with caution. These cards will likely have low limits and high interest rates. The best way to qualify for a credit card post-bankruptcy is to improve your credit score.  Here are some immediate steps you can take to improve your credit score after bankruptcy:

  1. Make sure all discharged debts are cleared from your credit report. If your credit reports are still showing delinquent accounts after you receive your bankruptcy discharge, this is likely affecting your credit score in a negative way.  You are entitled to a FREE credit report every year from the three credit bureaus.
  2. Get your noncredit finances in order. Although many bankruptcies are the result of medical bills, divorce, job loss or other unavoidable debts, it is also important to remember the fundamental problems with spending, saving and budgeting. Addressing these issues before applying for new credit can help you overall.
  3. Build credit. Once your finances are back in order, it is time to consider strategic credit building via a secured credit card or credit-builder loan.

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If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all 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, P.A. 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 website at www.miamibankruptcy.com.