As the world becomes more and more unhealthy, medical bankruptcy becomes more likely as people fight to cure various diseases and ailments associated with their lifestyle. Unforeseen medical bills can also wreak havoc on individuals that are unable to work while they are seriously ill. This may also be the case for individuals who have health insurance. Medical bankruptcy may be treated with a bit more sympathy by some courts, depending on the situation of the individual.
Examples of Groups Filing for Medical Bankruptcy
People who are 65 and over are more likely to suffer from medical bankruptcy than younger and healthier age groups. It goes without saying that the body becomes more prone to illness the older that we get. This makes it inevitable that as we get older and can longer work to pay the bills, we may be faced with medical bankruptcy in the case of a serious illness, if we have not taken preventative measures prior to the diagnosis.
Another group which is likely to file for medical bankruptcy is that of young single mothers. If their spouses have abandoned them and their children, and do not pay any child support, the mother will be left to pay these high expenses by herself. It is a difficult situation for any parent who has a sick child to care for, and if it is the parent who is sick herself then there will be no one to earn the money to pay the bills.
Low wage earners are another group that may find themselves filing for medical bankruptcy. At times it may be difficult to find jobs that can support all of a family's needs, so finding the money for unexpected medical bills can be a nearly impossible task for this group. Poor education and lack of practical skills can be attributing factors to this problem, and will require further investigation when the time arises.
Some people will file for medical bankruptcy simply because the medical systems are not willing to work out any payment schedules for them to repay their debts. Cases such as these have risen steadily over the years, and are now quite a common occurrence in bankruptcy courts around the country. Since many folks do not have large amounts of money readily available to pay mounting hospital costs, the only choice for some is to declare medical bankruptcy.
If you fall into any of these categories, you may find the claiming medical bankruptcy is the best choice for you to get out from under the weight of your bills. This bankruptcy is normally seen in a more sympathetic light than others by the courts and lenders, since the circumstances are generally unforeseen and unavoidable.
http://www.articlesbase.com/finance-articles/the-difficulty-in-medical-bankruptcy-178302.html
Tuesday, September 4, 2007
Debt Settlement: Debt Relief for the Elderly and the Disabled
Note: this is not to be considered legal advice, and it is dealing with the hypothetical “average” elderly and/or disabled person. Each case is unique and to determine the legal ramifications of your individual scenario you should consult an attorney.)
Debt settlement, also known as debt negotiation or debt reduction, is a relatively new way for dealing with your debt problems. In a debt settlement program, by negotiating with a creditor, a client can reduce their debt by as much as 50 percent and be debt free in as little as 12 to 30 months. In order to accomplish these savings, however, a client must voluntarily stop paying their creditors. By doing this, a creditor is forced to confront the following question: How can I collect the most money from this past due debtor with the least amount of effort and the least total expense to my company? Typically the answer to this question in the minds’ of creditors is accepting a lump sum settlement for less than the full balance owed.
Although the vast majority of cases work out according to this framework, as anyone who has ever read a debt negotiation contract can tell you---it’s impossible for a debt settlement company to guarantee that a client won’t be the target of any legal action by their creditors. After all, creditors are always reserved the right to sue debtors to collect a past due account, regardless of whether the consumer is taking any action to resolve the outstanding debt.
That being said, thanks to highly favorable state and federal debtor laws, the elderly and the disabled are very difficult to collect a past due debt from relative to the average American consumer, even if a creditor has sued them in court and won a judgment.
Consider the following situation. Let’s say a creditor has just sued you and won a judgment in court. They now have to execute the judgment in order to actually start collecting the debt. One way a creditor executes a judgment is through wage garnishment. When a creditor garnishes someone’s wages, they automatically (and legally) withdraw a certain percentage of that person’s wages every paycheck (25% after taxes in most states) until the debt is paid off. Fortunately, creditors cannot garnish Social Security, disability, and most pensions (unless the “creditor” is the mother of your children and she’s collecting alimony). This being the case, the creditor would probably look for another way to collect the debt. Levying a bank account is another common method for executing a judgment. Again the elderly and the disabled are protected, presuming the bank account’s funds are made up of the deposits from social security, pension, and/or disability benefits.
A creditor is always reserved the right to pursue legal action to collect a past due debt, even if the debtor is elderly or disabled. However, it only makes sense that they’d prefer to accept a settlement for less than the balance, especially if the debtor has no assets or lives in a debtor-friendly state like Texas, Florida, Iowa, Pennsylvania, Arkansas, or Oklahoma. It is for these reasons that credit card debt reduction makes a lot of sense for the elderly and the disabled who are struggling to pay their minimum payments each month.
http://www.articlesbase.com/finance-articles/debt-settlement-debt-relief-for-the-elderly-and-the-disabled-83013.html
Debt settlement, also known as debt negotiation or debt reduction, is a relatively new way for dealing with your debt problems. In a debt settlement program, by negotiating with a creditor, a client can reduce their debt by as much as 50 percent and be debt free in as little as 12 to 30 months. In order to accomplish these savings, however, a client must voluntarily stop paying their creditors. By doing this, a creditor is forced to confront the following question: How can I collect the most money from this past due debtor with the least amount of effort and the least total expense to my company? Typically the answer to this question in the minds’ of creditors is accepting a lump sum settlement for less than the full balance owed.
Although the vast majority of cases work out according to this framework, as anyone who has ever read a debt negotiation contract can tell you---it’s impossible for a debt settlement company to guarantee that a client won’t be the target of any legal action by their creditors. After all, creditors are always reserved the right to sue debtors to collect a past due account, regardless of whether the consumer is taking any action to resolve the outstanding debt.
That being said, thanks to highly favorable state and federal debtor laws, the elderly and the disabled are very difficult to collect a past due debt from relative to the average American consumer, even if a creditor has sued them in court and won a judgment.
Consider the following situation. Let’s say a creditor has just sued you and won a judgment in court. They now have to execute the judgment in order to actually start collecting the debt. One way a creditor executes a judgment is through wage garnishment. When a creditor garnishes someone’s wages, they automatically (and legally) withdraw a certain percentage of that person’s wages every paycheck (25% after taxes in most states) until the debt is paid off. Fortunately, creditors cannot garnish Social Security, disability, and most pensions (unless the “creditor” is the mother of your children and she’s collecting alimony). This being the case, the creditor would probably look for another way to collect the debt. Levying a bank account is another common method for executing a judgment. Again the elderly and the disabled are protected, presuming the bank account’s funds are made up of the deposits from social security, pension, and/or disability benefits.
A creditor is always reserved the right to pursue legal action to collect a past due debt, even if the debtor is elderly or disabled. However, it only makes sense that they’d prefer to accept a settlement for less than the balance, especially if the debtor has no assets or lives in a debtor-friendly state like Texas, Florida, Iowa, Pennsylvania, Arkansas, or Oklahoma. It is for these reasons that credit card debt reduction makes a lot of sense for the elderly and the disabled who are struggling to pay their minimum payments each month.
http://www.articlesbase.com/finance-articles/debt-settlement-debt-relief-for-the-elderly-and-the-disabled-83013.html
Bitten By Bankruptcy?
Research at The Debt Line has shown that up to 1 million people are on the verge of declaring themselves bankrupt as they struggle to cope with thousands of pounds worth of debt.
Bankruptcy is an option that often has to be considered when an individual cannot pay their debts as they fall due. A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order.
Bankruptcy is the most drastic method available for dealing with debts you cannot pay. It can however set you free from overwhelming debts so you can make a fresh start, and makes sure your assets are shared out fairly amongst your creditors. However there are many implications of bankruptcy. During your bankruptcy you will be subject to several restrictions, which can be avoided through an alternative to bankruptcy such as an IVA. Anyone can go bankrupt, and there are different insolvency procedures for dealing with companies and for individuals who become bankrupt.
Applying for an IVA is a regularly looked at as an avoidance from bankruptcy. The IVA enables you to cut your debts to an affordable level and clear them over a fixed period. The compromise should offer a larger repayment towards your debt than could otherwise be expected were you to be made bankrupt. You can even take out a fresh mortgage while in an IVA. What's more, it is a totally private arrangement - nobody needs to know about it apart from you, your advisors and your creditors. An IVA ensures that your home is protected and your job is not at risk and with The Debt Line an IVA can write off up to 75% of your debts.
There are so many advantages of an IVA. For example, there is not the stigma or the publicity that normally accompanies bankruptcy and the debtor can continue to trade in a business to generate money. It can give the peace of mind to have a fresh financial start.
The implications of bankruptcy are simple. Some of these disadvantages are: loosing control of your assets, not being able to act as a company director (if you wish to do so), being publicly examined in court and your credit being affected for many years after the annulment. It seems that as far as The Debt Line are concerned, the bankruptcy route could be very much avoided.
One in 8 of those with five-figure debts say they are 'quite likely' or 'very likely' to declare themselves bankrupt. Also, with an interest rate rise looking more and more definite, these figures are expected to grow. With the help of The Debt Line a growing number of people will be finding alternative ways to get themselves out of debt.
http://www.articlesbase.com/debt-consolidation-articles/bitten-by-bankruptcy-46568.html
Bankruptcy is an option that often has to be considered when an individual cannot pay their debts as they fall due. A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order.
Bankruptcy is the most drastic method available for dealing with debts you cannot pay. It can however set you free from overwhelming debts so you can make a fresh start, and makes sure your assets are shared out fairly amongst your creditors. However there are many implications of bankruptcy. During your bankruptcy you will be subject to several restrictions, which can be avoided through an alternative to bankruptcy such as an IVA. Anyone can go bankrupt, and there are different insolvency procedures for dealing with companies and for individuals who become bankrupt.
Applying for an IVA is a regularly looked at as an avoidance from bankruptcy. The IVA enables you to cut your debts to an affordable level and clear them over a fixed period. The compromise should offer a larger repayment towards your debt than could otherwise be expected were you to be made bankrupt. You can even take out a fresh mortgage while in an IVA. What's more, it is a totally private arrangement - nobody needs to know about it apart from you, your advisors and your creditors. An IVA ensures that your home is protected and your job is not at risk and with The Debt Line an IVA can write off up to 75% of your debts.
There are so many advantages of an IVA. For example, there is not the stigma or the publicity that normally accompanies bankruptcy and the debtor can continue to trade in a business to generate money. It can give the peace of mind to have a fresh financial start.
The implications of bankruptcy are simple. Some of these disadvantages are: loosing control of your assets, not being able to act as a company director (if you wish to do so), being publicly examined in court and your credit being affected for many years after the annulment. It seems that as far as The Debt Line are concerned, the bankruptcy route could be very much avoided.
One in 8 of those with five-figure debts say they are 'quite likely' or 'very likely' to declare themselves bankrupt. Also, with an interest rate rise looking more and more definite, these figures are expected to grow. With the help of The Debt Line a growing number of people will be finding alternative ways to get themselves out of debt.
http://www.articlesbase.com/debt-consolidation-articles/bitten-by-bankruptcy-46568.html
Smart Debt Recovery With Alternatives to Bankruptcy!
Bankruptcy is a legally declared inability to pay back all your lenders. One can seek out for a creditor in filing bankruptcy, in order to recoup a portion of what you owe. It is carried out by a bankruptcy attorney in a legal manner. Basically gives a borrower indebted, a new lease of life. As it helps relieve the debtor off his pending debts and enables him to repay the creditor systematically, he only pays what he can afford to pay.
Basic purpose of filing bankruptcy:
Gives a new lease of life to all those debtors trapped badly in debts
Stops creditors from taking any legal action against debtors
Relieves the debtor off his debts
Repay only what you can afford
Repay in a systematic manner
Commonly personal bankruptcy is of two kinds:
Chapter 7 Bankruptcy
Chapter 13 Bankruptcy
Chapter 7 Bankruptcy is when you discharge all your debts with the help of a court. To discharge all your debts you will in turn give up your property. It can also include items that are already paid off. However, not all debts can be discharged under this.
Chapter 13 Bankruptcy helps you to get rid of debt by obtaining a court approved plan to repay back. It is usually stretched over 3-5 year period and lets you pay back your debts in an orderly manner. You get to keep your personal property and pay only what you can afford to pay till that date. So your creditor generally accepts less than the whole amount.
Unfortunately, filing bankruptcy can cause adverse credit problems for roughly around 7-10 years. It will also reflect badly on your credit history and is not favourable in terms
of credit worthiness. After bankruptcy, you might be doing exceptionally well on your financial front, but you will still face problems. Every time you apply for a personal loan or home loan you will either be denied of loans or are subjected to unusually high rate of interest.
Consider bankruptcy alternatives:
Debt consolidation
Seek help to consolidate or pool together your existing debts into one single new loan, with a lower monthly repayment. The payments being lower for two main reasons:
(a) The loan is spread over a longer period of time than your existing debts
(b) The interest rate being charged is less than the average rate on your current debts.
Whilst this is not the answer for many people, it can be a useful tool during a period of low interest rates, or when there is sufficient equity built up in a property so that a second mortgage or remortgage can be arranged.
IVA
A true alternative to using a debt consolidation and bankruptcy is IVA. IVA helps you to make an agreement between you and your creditor, wherein you agree to pay back a certain amount of your loan within a period of 60 months or so, beyond which your debts are written off. Your IVA can be arranged only by an insolvency practitioner to get you out of unsecured debts of £15,000 or more.
In addition to this, your interest charges and court proceedings will stop. You wipe off up to 80% of your debts.
Bankruptcy is the last option to be considered. But once you are declared bankrupt you are likely to be trapped in it for many years. The long-term ramifications of which include being unable to access credit, be in certain types of business or open a bank current account.
http://www.articlesbase.com/loans-articles/smart-debt-recovery-with-alternatives-to-bankruptcy-90872.html
Basic purpose of filing bankruptcy:
Gives a new lease of life to all those debtors trapped badly in debts
Stops creditors from taking any legal action against debtors
Relieves the debtor off his debts
Repay only what you can afford
Repay in a systematic manner
Commonly personal bankruptcy is of two kinds:
Chapter 7 Bankruptcy
Chapter 13 Bankruptcy
Chapter 7 Bankruptcy is when you discharge all your debts with the help of a court. To discharge all your debts you will in turn give up your property. It can also include items that are already paid off. However, not all debts can be discharged under this.
Chapter 13 Bankruptcy helps you to get rid of debt by obtaining a court approved plan to repay back. It is usually stretched over 3-5 year period and lets you pay back your debts in an orderly manner. You get to keep your personal property and pay only what you can afford to pay till that date. So your creditor generally accepts less than the whole amount.
Unfortunately, filing bankruptcy can cause adverse credit problems for roughly around 7-10 years. It will also reflect badly on your credit history and is not favourable in terms
of credit worthiness. After bankruptcy, you might be doing exceptionally well on your financial front, but you will still face problems. Every time you apply for a personal loan or home loan you will either be denied of loans or are subjected to unusually high rate of interest.
Consider bankruptcy alternatives:
Debt consolidation
Seek help to consolidate or pool together your existing debts into one single new loan, with a lower monthly repayment. The payments being lower for two main reasons:
(a) The loan is spread over a longer period of time than your existing debts
(b) The interest rate being charged is less than the average rate on your current debts.
Whilst this is not the answer for many people, it can be a useful tool during a period of low interest rates, or when there is sufficient equity built up in a property so that a second mortgage or remortgage can be arranged.
IVA
A true alternative to using a debt consolidation and bankruptcy is IVA. IVA helps you to make an agreement between you and your creditor, wherein you agree to pay back a certain amount of your loan within a period of 60 months or so, beyond which your debts are written off. Your IVA can be arranged only by an insolvency practitioner to get you out of unsecured debts of £15,000 or more.
In addition to this, your interest charges and court proceedings will stop. You wipe off up to 80% of your debts.
Bankruptcy is the last option to be considered. But once you are declared bankrupt you are likely to be trapped in it for many years. The long-term ramifications of which include being unable to access credit, be in certain types of business or open a bank current account.
http://www.articlesbase.com/loans-articles/smart-debt-recovery-with-alternatives-to-bankruptcy-90872.html
Monday, September 3, 2007
Bankruptcy and the Investor
Investing is all fun and games until someone goes broke. One hard reality which ever investor has to come to terms with is that you are not always going to gain. In a matter of six months, with bad decisions, a stock portfolio can be completely destroyed. Leaving the investor with no cash flow and no way to pay bills. There are very little options for investors who have had some bad luck other than to file bankruptcy. Bankruptcy is a process in which an individual who is in debt can seek relief from that debt from the government. It can be a viable option to an investor debt relief but certainly should not be the first choice.
There is no clear way to know if you should file for bankruptcy or not. Discuss your with your financial advisor or seek the help of a credit counselor. Additionally, most bankruptcy attorneys offer a free advisory meeting to help you clarify issues and see if you are a good candidate for bankruptcy. Bankruptcy is a choice that you will have to live with for years. It will affect your ability to get a loan, lease a car, rent an apartment, and invest. Individuals who file bankruptcy are considered back risk for lending and investment companies. There are alternatives to filing bankruptcy. Below are a summary of those options. Choosing which option is for you is going to depend on your specific situation and how much in debt you actually are.
Hire a Financial Advisor - This may be hard for an investor to do but often giving up the control of your money can help you get a grasp on your life. A financial manager takes your money, pays your bills, gives you set allowance. This is done until your life, finances, and spending habits are in control. If feel you can help self control seek out a financial counselor that can help you set up a budget. Making a budget is the easy part, adhering to it can be extremely difficult. Make sure you select an experienced and moderately priced financial manager. Many managers offer services for large fees and have very little experience.
Working with Creditors - Calling up your creditors, explaining your situation, and hoping that they will be able to work with you is always an options. Some creditors are more than willing to help their clients through a time of financial crisis. Most creditors are aware that some debts are just hard to collect even if there has been a bankruptcy therefore it is in their best interest to work with you.
Refinance What You Can- If you own a home, and have some equity in the home, consider refinancing your home to pay off all of your high interest debt. Make sure you seek out refinancing options from a bank or respectable lending institution. There are many companies who will offer to combine all your debts into one low payment but these companies also charge huge fees for this service. In other words to not give up one group of debts for another (perhaps more damaging) debt.
http://www.articleco.com/Article/Bankruptcy-and-the-Investor/39737
There is no clear way to know if you should file for bankruptcy or not. Discuss your with your financial advisor or seek the help of a credit counselor. Additionally, most bankruptcy attorneys offer a free advisory meeting to help you clarify issues and see if you are a good candidate for bankruptcy. Bankruptcy is a choice that you will have to live with for years. It will affect your ability to get a loan, lease a car, rent an apartment, and invest. Individuals who file bankruptcy are considered back risk for lending and investment companies. There are alternatives to filing bankruptcy. Below are a summary of those options. Choosing which option is for you is going to depend on your specific situation and how much in debt you actually are.
Hire a Financial Advisor - This may be hard for an investor to do but often giving up the control of your money can help you get a grasp on your life. A financial manager takes your money, pays your bills, gives you set allowance. This is done until your life, finances, and spending habits are in control. If feel you can help self control seek out a financial counselor that can help you set up a budget. Making a budget is the easy part, adhering to it can be extremely difficult. Make sure you select an experienced and moderately priced financial manager. Many managers offer services for large fees and have very little experience.
Working with Creditors - Calling up your creditors, explaining your situation, and hoping that they will be able to work with you is always an options. Some creditors are more than willing to help their clients through a time of financial crisis. Most creditors are aware that some debts are just hard to collect even if there has been a bankruptcy therefore it is in their best interest to work with you.
Refinance What You Can- If you own a home, and have some equity in the home, consider refinancing your home to pay off all of your high interest debt. Make sure you seek out refinancing options from a bank or respectable lending institution. There are many companies who will offer to combine all your debts into one low payment but these companies also charge huge fees for this service. In other words to not give up one group of debts for another (perhaps more damaging) debt.
http://www.articleco.com/Article/Bankruptcy-and-the-Investor/39737
Getting A Credit Card After Bankruptcy
If you have had to declare bankruptcy for any reason, it is easy to get overwhelmed by the sheer volume of things to consider. But, getting a credit card after bankruptcy is one of the best ways to begin rebuilding your credit score, if you are careful and selective about choosing the right card and provider.
Lets face it; a bankruptcy is a huge blow to your credit-worthiness. However, a sober assessment of your situation, followed by learning from the mistakes that may have led to the bankruptcy, is key to getting your financial house back in order by obtaining lines of credit that you can use to rebuild your credit score.
Get Credit Reports From All 3 Major Credit Bureaus
The first step to finding the best rates on a credit card after bankruptcy is getting a copy of your credit report from each credit bureau. Lenders rely on the credit reports from 3 main credit agencies to determine your credit-worthiness, and the rates that you will pay on borrowed money. These agencies are: Experian, Equifax, and TransUnion.
After you receive your reports, carefully examine them for inaccuracies that can continue to undermine your efforts to re-establish credit. If you discover claims that are false, contact each agency and:
Keep a record of all correspondence.
Write a letter to each agency disputing the inaccuracies.
Notify the business that reported the false claim in writing and tell them that you are disputing it.
Request that the agency contact the business so that the dispute can be resolved.
Make sure that a record of your disputes is included in future credit reports.
Secured vs. Unsecured Credit Cards, Which is Best For Your Situation
There is no stock answer that will work for everyone on this. The particulars of each persons situation will dictate which option will work best for them but here are some facts to inform your decision:
Secured Credit Cards
Secured credit cards are cards that are issued from banks or credit unions that guarantee a specific line of credit as long as you have a corresponding balance in your account that they can use as collateral if you default on a payment. For example, if you have a $500 line of credit, you must maintain a balance of $500 in your account.
Because your debt is secured by a predetermined amount, you can generally get a more favorable rate of interest from these lenders. But, it is recommended that you pay the full balance each month to keep your account in good standing. Look for a card that will offer the option of becoming unsecured after a period of responsible use.
Unsecured Credit Cards
Unsecured credit cards are easily available from all sorts of lenders and there lies the rub, easy availability. These cards offer huge come-ons about increased lines of credit without the need to maintain a balance, but you run the risk of repeating some of the same mistakes that may have contributed to your bankruptcy in the first place.
In fact, there are many credit card outfits out there that specifically target people that have filed for bankruptcy and take advantage of this by offering egregiously high interest rates. Also, they further leverage their position by nickel and diming you with all sorts of application fees meant to prey on your financial vulnerability.
Whichever type of credit card that you choose, make sure that you explore all of your options, and read the fine print before you sign the agreement. There may be hidden fees and costs that will hinder, not help, you in your quest to rebuild your credit rating. Also, make sure that you do not apply for more than 1 or 2 different credit cards. Each rejection will negatively affect your credit rating, and defeat the purpose of getting a credit card in the first place.
Summary
Getting a credit card after bankruptcy to start rebuilding your credit rating is a marathon, not a sprint. You must carefully plan when and how to use your credit card so that it becomes an asset instead of a liability.
Make sure that you pay off the full balance each month, well before the due date, and use your credit card only when absolutely necessary. After every 6 months of responsible credit management, call your lender and ask for a lower interest rate. They might not honor your request each time, but they will like the fact that you are actively pursuing the means to manage your credit more effectively.
The next time you reach for your wallet and dont have the cash on hand to make a purchase, ask yourself, Is this a want or a need. If the answer is the former, put your wallet away and congratulate yourself for making another step on the long road of credit rating recovery.
http://www.articleco.com/Article/Getting-A-Credit-Card-After-Bankruptcy/48857
Lets face it; a bankruptcy is a huge blow to your credit-worthiness. However, a sober assessment of your situation, followed by learning from the mistakes that may have led to the bankruptcy, is key to getting your financial house back in order by obtaining lines of credit that you can use to rebuild your credit score.
Get Credit Reports From All 3 Major Credit Bureaus
The first step to finding the best rates on a credit card after bankruptcy is getting a copy of your credit report from each credit bureau. Lenders rely on the credit reports from 3 main credit agencies to determine your credit-worthiness, and the rates that you will pay on borrowed money. These agencies are: Experian, Equifax, and TransUnion.
After you receive your reports, carefully examine them for inaccuracies that can continue to undermine your efforts to re-establish credit. If you discover claims that are false, contact each agency and:
Keep a record of all correspondence.
Write a letter to each agency disputing the inaccuracies.
Notify the business that reported the false claim in writing and tell them that you are disputing it.
Request that the agency contact the business so that the dispute can be resolved.
Make sure that a record of your disputes is included in future credit reports.
Secured vs. Unsecured Credit Cards, Which is Best For Your Situation
There is no stock answer that will work for everyone on this. The particulars of each persons situation will dictate which option will work best for them but here are some facts to inform your decision:
Secured Credit Cards
Secured credit cards are cards that are issued from banks or credit unions that guarantee a specific line of credit as long as you have a corresponding balance in your account that they can use as collateral if you default on a payment. For example, if you have a $500 line of credit, you must maintain a balance of $500 in your account.
Because your debt is secured by a predetermined amount, you can generally get a more favorable rate of interest from these lenders. But, it is recommended that you pay the full balance each month to keep your account in good standing. Look for a card that will offer the option of becoming unsecured after a period of responsible use.
Unsecured Credit Cards
Unsecured credit cards are easily available from all sorts of lenders and there lies the rub, easy availability. These cards offer huge come-ons about increased lines of credit without the need to maintain a balance, but you run the risk of repeating some of the same mistakes that may have contributed to your bankruptcy in the first place.
In fact, there are many credit card outfits out there that specifically target people that have filed for bankruptcy and take advantage of this by offering egregiously high interest rates. Also, they further leverage their position by nickel and diming you with all sorts of application fees meant to prey on your financial vulnerability.
Whichever type of credit card that you choose, make sure that you explore all of your options, and read the fine print before you sign the agreement. There may be hidden fees and costs that will hinder, not help, you in your quest to rebuild your credit rating. Also, make sure that you do not apply for more than 1 or 2 different credit cards. Each rejection will negatively affect your credit rating, and defeat the purpose of getting a credit card in the first place.
Summary
Getting a credit card after bankruptcy to start rebuilding your credit rating is a marathon, not a sprint. You must carefully plan when and how to use your credit card so that it becomes an asset instead of a liability.
Make sure that you pay off the full balance each month, well before the due date, and use your credit card only when absolutely necessary. After every 6 months of responsible credit management, call your lender and ask for a lower interest rate. They might not honor your request each time, but they will like the fact that you are actively pursuing the means to manage your credit more effectively.
The next time you reach for your wallet and dont have the cash on hand to make a purchase, ask yourself, Is this a want or a need. If the answer is the former, put your wallet away and congratulate yourself for making another step on the long road of credit rating recovery.
http://www.articleco.com/Article/Getting-A-Credit-Card-After-Bankruptcy/48857
Discharged Bankruptcy These Steps Could Help
If you have a discharged bankruptcy, here are three steps that could help increase your chances of qualifying for credit and loans:
1. Order copies of your credit reports
You will want to order copies of your credit reports from the major credit reporting agencies (Experian, Equifax, and Trans Union) after your discharged bankruptcy. You can order your reports by mail, telephone, or online.
You may even be entitled to a free copy of your credit report - check with each of the major credit reporting agencies. In After Bankruptcy Credit Solutions I cover five ways to get a free copy of your credit report. But free or not, ordering copies of your credit reports after your discharged bankruptcy is important if you are planning to apply for any credit or loans.
2. Clean up your credit reports
Once you have copies of your credit reports, you will want to review each one carefully. You will want to make a note of any inaccurate or obsolete negative information that needs to corrected or removed. You will also want to make sure that your discharged bankruptcy is being reported correctly on each credit report.
While there is not enough room here to go into detail on how to correct or remove any inaccurate or obsolete negatvie information on your credit reports, I explain how in After Bankruptcy Solutions - and also what to look for when cleaning up your credit reports after a discharged bankruptcy.
3. Focus on increasing your credit score
Cleaning up your credit reports after a discharged bankruptcy is one way that could help increase your credit score. There are a number of other ways as well including: Establishing some new accounts and paying them in a timely manner over time, maintaining low balances on your credit card accounts, and even adding years of positive credit history to your credit reports.
In this article we looked at three steps that could help increase your chances of qualifying for credit and loans after a discharged bankruptcy. There are a number of other strategies you can use � but I will save those for future articles dealing with credit and loans after a discharged bankruptcy.
The company and product/service names referenced in this article are the trademarks, registered trademarks or service marks of their respective owners. None of the owners have sponsored or endorsed this article.
DISCLAIMER:
This information is designed to provide only a general overview of the subject matter herein.
This information is provided with the understanding that neither the publisher nor author is engaged in rendering legal, accounting or other professional advice. If legal or other expert assistance is required, the services of a professional should be sought.
Neither the publisher nor author shall be liable for any loss or damages, including but not limited to special, consequential, incidental or other damages, caused by the information contained herein.
http://www.articleco.com/Article/Discharged-Bankruptcy--These-Steps-Could-Help/3339
1. Order copies of your credit reports
You will want to order copies of your credit reports from the major credit reporting agencies (Experian, Equifax, and Trans Union) after your discharged bankruptcy. You can order your reports by mail, telephone, or online.
You may even be entitled to a free copy of your credit report - check with each of the major credit reporting agencies. In After Bankruptcy Credit Solutions I cover five ways to get a free copy of your credit report. But free or not, ordering copies of your credit reports after your discharged bankruptcy is important if you are planning to apply for any credit or loans.
2. Clean up your credit reports
Once you have copies of your credit reports, you will want to review each one carefully. You will want to make a note of any inaccurate or obsolete negative information that needs to corrected or removed. You will also want to make sure that your discharged bankruptcy is being reported correctly on each credit report.
While there is not enough room here to go into detail on how to correct or remove any inaccurate or obsolete negatvie information on your credit reports, I explain how in After Bankruptcy Solutions - and also what to look for when cleaning up your credit reports after a discharged bankruptcy.
3. Focus on increasing your credit score
Cleaning up your credit reports after a discharged bankruptcy is one way that could help increase your credit score. There are a number of other ways as well including: Establishing some new accounts and paying them in a timely manner over time, maintaining low balances on your credit card accounts, and even adding years of positive credit history to your credit reports.
In this article we looked at three steps that could help increase your chances of qualifying for credit and loans after a discharged bankruptcy. There are a number of other strategies you can use � but I will save those for future articles dealing with credit and loans after a discharged bankruptcy.
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