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 offers consumers a fresh financial start, but many people hold off on filing bankruptcy for fear of the negative effect it will have on their credit. This is one of the most common bankruptcy myths, and can keep individuals who are drowning financially from filing for bankruptcy. Bouncing back after bankruptcy is possible, and with proper discipline, it can be done relatively quickly.
According to a recent study by LendingTree, 65 percent of people who filed for bankruptcy in 2017, had a credit score of 640 or higher in two years. The following tips can help you bounce back quickly after bankruptcy.
After filing for bankruptcy, you are going to want to begin rebuilding your credit as soon as possible. You can start by checking your FREE annual credit report on AnnualCreditReport.com to get reports from the three major credit bureaus: Equifax, TransUnion and Experian.
Your report may show late and missed payments on credit cards, mortgages and credit accounts you may have opened or closed. Bankruptcy provides you with a clean slate, which means you have a second chance to pay your bills on-time and in full.
If your credit score is in the low 600s, your credit is still too low for most decent loans with good terms, but you can work quickly to get it back up in the mid-700s.
After bankruptcy, when accessing and utilizing credit again, keep your credit card balances relatively low compared to the card’s limit. For example, less than 30% is typically advised while using just 10% of the available credit is even better.
Once your credit score improves, you can then find the right mortgage lender, real estate agent, and the right attorney to move forward with the purchase of your new home.
Still not convinced? A testimonial from one of our clients in regards to their credit score after filing for bankruptcy.
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.
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.
Related Resources: https://www.washingtonpost.com/news/where-we-live/wp/2018/03/05/financial-steps-to-take-if-you-want-to-buy-a-home-after-a-bankruptcy/?utm_term=.83d7fe172cc1
The Better Business Bureau is warning consumers of a new debt collection scam. It involves a supposed debt collector informing you that a civil complaint has been filed against you- and scammers are doing an excellent job of making it seem real. They may rattle off specific details, such as the amount of the debt, a complaint case number and a phone number where you can follow up. If you end up calling that number, another phony representative will inform you of the same. To avoid a pending lawsuit you must pay up immediately via wire transfer or prepaid debt card, the scammer says.
Consumers can protect themselves from scams like this by knowing their rights.
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 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.
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Having a low credit score can cost you. If you have a credit score of 620 or below, this is considered to be “bad credit.” Lenders or credit card issuers, if they are willing to extend you credit at all, are likely to charge you a higher interest rate. You may also have to pay a utility deposit when starting or renewing service, something people with good credit do not have to pay. Having a bad credit score can even effect how much you pay for car insurance.
Now onto the good news- there are things you can do to improve your credit score. Following these easy steps will help push your score in the right direction.
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.
Related Resources: http://www.bankrate.com/finance/debt/7-simple-ways-improve-credit-score-1.aspx
Know your loans. Check copies of your FREE credit report from the three major credit bureaus via annualcreditreport.com if you think you may have lost track of a loan, as lenders will almost always report the existence of the loan to the bureaus. For federal loans, check the National Student Loan Data System. Always know how much you owe, and to whom.
Know your options when it comes to income-driven repayment plans. If you have federal loans, you may be eligible for a payment plan that allows you to submit information based on your income and family size and then reduce monthly payments to amounts that are affordable for you. Here is a list of Income-Driven Repayment Plans available through the Education Dept. and answers to frequently asked questions.
Stay Informed. Signing up for an income-driven repayment plan is not enough. You have to re-qualify each year with updated financial information. Do not trust your lender to do this for you. The consumer bureau recently accused Navient, the largest student loan servicer in the U.S., of not properly informing borrowers of this fact or of crucial deadlines. As a result, many borrowers saw their payments jump, leading to numerous late payments and additional interest and fees.
Avoid Forbearance. If you are having trouble making your monthly payments, your servicer may offer you something called a forbearance, which essentially allows you to reduce or even eliminate payments for a period of time. The downside: The loan’s interest keeps piling up. Recently, Navient was charged with steering borrowers into forbearance when they may have had better options, such as income-driven repayment plans.
For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you 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.
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A bill sent to collections can stay on your credit report for up to seven years and have a negative impact on your credit score. Sometimes people are unaware they have an unpaid bill until a debt collector contacts them, others have fallen on hard times and do not have a choice but to let their debt go to collections.
So how quickly can a creditor send an unpaid bill to a debt collector?
This can occur as soon as the default in payment has occurred. For example, if you made a promise to pay on a certain date and failed to do so, you could be sent to collections the very next day. However, if there is a contractual grace period, the creditor cannot send the account to collections until the grace period has expired.
You may be able to negotiate with the creditor (or landlord, doctor’s office, utility company, etc.) by explaining your situation and working out a payment plan. Keep in mind, they want to get paid, rather than write the debt off as a loss.
If you end up with a collection account on your credit report, you can try to have it removed. If it cannot be removed, focus on other aspects of your credit, like paying down debt and making future payments on time. This will help rehabilitate your credit score overtime.
It is also a good idea to regularly review your credit report for mistakes, because credit report errors are common and can damage your credit- unnecessarily. You are entitled to a free annual credit report from each of the three major credit reporting agencies — Equifax, Experian and TransUnion.
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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 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, 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.
Federal and state authorities are cracking down on a multi-million dollar debt collection scheme that profited at least $3.8 million from consumers who were tricked into paying off debts they never owed in the first place.
The Federal Trade Commission has taken action, setting up “Operation Collection Protection,” an ongoing effort to combat phony debt collection schemes, which has become the number one consumer complaint at the FTC.
Six companies and three individuals are being sued who used a variety of business names including Stark Law, Stark Recovery and Capital Harris Miller & Associates in what the complaint alleges was actually part of a “telephone boiler room operation” that harassed consumers nationwide for money they did not owe.
Victims had previously entered personal information into online loan websites. Authorities believe many of these sites were fake and designed to gather consumers’ personal information. Callers allegedly told the consumers they had outstanding debts and threatened them with lawsuits or said that debt collectors would contact their employers or relatives.
The debt collectors detailed personal information over the phone, including consumers’ social security numbers, full names, addresses and employment information to convince consumers of their legitimacy.
Phantom debt collection is a growing problem. Last year, the FTC received nearly 900,000 debt collection complaints. Debt collection complaints even surpassed identity theft, which had been the number one issue for consumers for the past 14 years.
You have rights when it comes to debt collection. Remember these tips:
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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.
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:
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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.
