Monday, May 7, 2007

Rebuilding Your Credit After Bankruptcy

In the past, filing bankruptcy was like having a Scarlet Letter on your chest. Bankruptcy made people outcasts and pariahs. It was as if a contagious disease struck, and no one wanted to be near you for fear of infection.

In the past, filing bankruptcy was like having a Scarlet Letter on your chest. Bankruptcy made people outcasts and pariahs. It was as if a contagious disease struck, and no one wanted to be near you for fear of infection.

Today, bankruptcy doesn’t quite have the stigma it used to. Many of the world’s most successful people have filed for bankruptcy. These people hit rock bottom, and have bounced back to become wildly successful.

To emerge from bankruptcy requires diligence and discipline. In order to get back on your financial feet, you must rebuild your credit.

If you filed a chapter 13 bankruptcy, you had to make your court-ordered payments until the bankruptcy was satisfied. Even though you made great strides financially by doing so, lenders don’t see it quite that way. Lenders don’t consider your bankruptcy payments as a way to rebuild your credit. In fact, the “rebuilding credit” clock starts after it’s discharged, no matter how long it takes you to pay while in chapter 13.

If you filed a chapter 7 bankruptcy, rebuilding won’t take quite as long. When you file for chapter 7 bankruptcy, your debts are essentially wiped out, and you start all over. Once your chapter 7 is discharged, which usually takes a few months from when you filed, your rebuilding credit clock starts.

When you file for chapter 7 bankruptcy, you have the choice of reaffirming some of your debt. In other words, you can choose to keep some of your credit lines open instead of having them wiped out. This is an option you might want to consider, especially if you have smaller credit cards with low balances (under $500). By continuing to pay your reaffirmed debt, you can help rebuild your credit with timely payments and low balances.

Regardless of which bankruptcy you file, there will come a time when the bankruptcy is fully discharged. It’s almost like being free after years in prison – you made some mistakes, you paid for them, you (hopefully) learned your lesson, and you’re looking to make a fresh start. Now, you have to rebuild your credit.

Paradoxically, you need to obtain credit to rebuild credit, but you can’t obtain credit if you just invalidated your creditors. One of the best and most popular ways to begin the process is to obtain a secured credit card. With a secured credit card, a credit company will extend you a credit line in exchange for a cash deposit. Your credit limit is usually equal to, or a percentage of, your deposit. Rarely, if ever, will it be higher than your deposit.

These credit cards are not hard to find. In fact, since bankruptcy is public record, many of these companies will find your name at the county courthouse and send you a solicitation to apply. You must be careful when dealing with these companies. Some are notorious for “kicking you when you’re down.” In addition to the deposit, they will charge you exorbitant junk fees and interest rates. Always read the fine print in the solicitation. As required by law, they must disclose their fees and rates to you.

As well, make absolutely sure that the credit card company actually reports your payment history to the three major credit bureaus. Getting a secured credit card is worthless if your history isn’t reported. It’s worth repeating that you must find out if they report to all three bureaus, as opposed to just one or two. You will handicap your rebuilding efforts if the history does not show up on all three.

Lastly, make sure the credit card is an actual Visa or MasterCard. Some credit companies offer credit cards that are only usable on their own products. They look like real credit cards, but if they’re not Visa or MasterCard, you can’t use them anywhere of consequence.
Once you have discharged your bankruptcy, obtain a copy of your credit report from the three major bureaus. In order to start your rebuilding credit campaign, you must know where you stand. Filing bankruptcy will have a tremendous impact on your credit scores. When you know where your score standsHealth Fitness Articles, you can take the necessary steps to boost them in the shortest possible amount of time.


ABOUT THE AUTHOR

Frank Bruno has spent the last 3 years assisting hundreds of clients in saving thousands of dollars in Interest rates by teaching them unique techniques on how to quickly and dramatically raise their credit scores. For more information please visit his website- http://www.CreditScoreBooster.com

What Bankruptcy Really Means for your Financial Future

All of this negative publicity about bankruptcy and mortgages, and you’re probably thinking to yourself, “There’s no way I’m ever going to declare bankruptcy!”

All of this negative publicity about bankruptcy and mortgages, and you’re probably thinking to yourself, “There’s no way I’m ever going to declare bankruptcy!” Whilst this is a great attitude to have, it is important to know that much of what you know about bankruptcy and mortgages is wrong. This comes as great news to those of you who have or currently are bankrupt, so spend some time checking out what bankruptcy really means for your financial future.

The Myths
Before taking a look at the reality of bankruptcy with relation to your financial future, it’s good to check out the myths that have been circulating for many years, compliments of mainstream lenders, most mortgage brokers and the media. Here’s just a few of the myths:

* If people end up bankrupt, it’s their own fault;
* Most people who are or have been bankrupt had no other choice other than to go bankrupt – they will always be bad with money;
* People who have or are bankrupt will never obtain finance or a mortgage; and
* If you are or have been bankrupt, forget about ever achieving a financially secure future.

Sure, bankruptcy isn’t a great thing to have to experience. After all, a bankruptcy will always be on your credit file, so it can be a painful reminder of a very difficult time in your life. This said however, each of the four points listed above are myths. Here’s why:

* Sure, sometimes we make mistakes with money, but we aren’t really educated on how to handle money. In our school systems good money management it isn’t taught and our financial institutions are constantly bombarding us with marketing material, encouraging us to spend up big – even if we don’t have the money. It’s a buy now, pay later mentality and the truth is it’s a conspiracy! The big financial institutions vs the financially un-educated masses, and most of the time the big guys win. It’s not your fault if you go bankrupt, because so many external factors will come into play.
* Most people who declare bankruptcy do so because they have been given poor or incorrect advice. Many people believe that bankruptcy is their only option, when it more than likely is not. If people speak to reputable bad credit experts, other not-so-drastic options will be presented to them, which will help them out of debt.
* People who are or have been bankrupt can get finance – they can even get a home loan. Bad credit mortgage experts help people with bad credit secure home loans – with competitive rates. The key is to consult with a bad credit expert who is reputable and experienced in this field. Talk to a specialist today! Don’t be fooled by the advertising and myths that say interest rates on high risk loans are through the roof, because it’s just not true.
* Even if you have or are bankrupt, you can still achieve a financially secure future. If you get the right advice from a reputable bad credit mortgage specialist, you can follow their expert directions and look forward to a financially secure future.

Bankruptcy isn’t the End!
If you are or have been bankrupt, it isn’t the end! In fact, far from it! Even a traumatic event like bankruptcy can be seen as an opportunity. This is how it should always be viewed. It is an opportunity to work with a financial expert who can provide you with the guidance you need to enjoy a financially independent future. To get back on the path to a good financial standingFree Reprint Articles, seek out a reputable specialist today!

ABOUT THE AUTHOR

Julian Thornton is a Melbourne, Australia-based mortgage and debt analyst specialist. Julian specializes in the field of bad credit mortgages and personal money management coaching.

What Does A Bankruptcy Trustee Do?

Once you file bankruptcy, a court appointed bankruptcy trustee will oversee your case. The new law also requires that the bankruptcy petitioner to take a debtor education course and receive credit counseling from a U.S. Trustee approved non profit credit counseling agency.

United States Trustees supervise the administration of the following cases filed under the Federal Bankruptcy Code:
* Liquidation proceedings under Chapter 7 bankruptcy- Those assets that are not exempt from creditors are collected and liquidated (reduced to money). The proceeds are distributed to creditors by a private trustee appointed to administer the debtor’s estate under Chapter 7.
* “Wage-earner” reorganization proceedings under Chapter 13- Chapter 13 bankruptcy- , is used primarily by individual consumers to reorganize their financial affairs under a repayment plan that must be completed within three to five years. A “standing trustee” appointed by the United States Trustee typically serves as a trustee of the U.S. Bankruptcy Court where the case was filed.

Specific responsibilities of the United States Trustees include:
* Appointing and supervising private trustees who administer Chapter 7, 12 and 13 bankruptcy estates (and serving as trustees in such cases where private trustees are unable or unwilling to serve).
* Taking legal action to enforce the requirements of the Bankruptcy Code and to prevent fraud and abuse.
* Referring matters for investigation and criminal prosecution when appropriate.
* Ensuring that bankruptcy- estates are administered promptly and efficientlyHealth Fitness Articles, and that professional fees are reasonable.
* Appointing and convening creditors’ committees in Chapter 11 business reorganization cases.
* Reviewing disclosure statements and applications for the retention of professionals.
* Advocating matters relating to the Bankruptcy Code and rules of procedure in court.

ABOUT THE AUTHOR

Original content from bankruptcyhome.com can contact at info@bankruptcyhome.com