Archive for January, 2015

Improving Credit Rating after Bankruptcy

Friday, January 23rd, 2015

Bankruptcy is something that can happen to almost anyone. Losing your job, unexpected medical bills, bad health – a lot of things can happen.broken piggy bank Bankruptcy can give you a fresh start. Part of that fresh start is to work towards rebuilding your credit score. According to Credit Dot Com News, there are things that you can to do repair your credit.

What Is a Credit Score?

Before you start taking steps to fix your credit score, it is important to know what the score is and why it’s so important to your financial future. When you apply for any type of credit – credit cards, car loans, mortgage or rental agreements, student loans – the financial agency first looks at your credit history to determine if they should lend to you or not. Many lenders use FICO scores as part of those decisions. If your FICO scores are in the mid 700’s or above, that generally means you have good credit and it shouldn’t be difficult for you to get approved, provided you meet lender’s other requirements.

How Do I Improve My Credit Score?

It is important that you understand what happens when you file a bankruptcy. A bankruptcy can remain on your credit report for up to 10 years and there is a good chance your FICO score will be low until you have started rebuilding your credit. You can take the following steps to start raising your scores.

Review Your Credit Report

The first step is knowing where you are and where you need to go. The first thing you should do is obtain a copy of your credit reports and make sure there are no errors or inconsistencies. You can request one free copy of your credit repo per year from Equifax, Experian and TransUnion.

Pay Bills On Time

Your payment history makes up 35% of your credit score. One of the easiest ways to improve your score is to always make sure you pay bills on time.

Tip: Set up reminders on your calendar to pay bills every month by the due date. Many banks and creditors offer services that allow you to set up your payments electronically so you don’t forget.

Apply for Credit…Cautiously

If you didn’t keep a major credit card account open during your bankruptcy, it’s a good idea to get one after your bankruptcy has been discharged. You may have to start with a secured card, which requires that you place a security deposit with the issuer. Once you get the card, it’s perfectly fine to pay the bill off in full each month. You don’t have to carry balances on your credit cards to build good credit.

Add a Loan Down the Road

Once you have gone a year or two post-bankruptcy, consider getting a car loan or line of credit. If it’s a car loan, buy a vehicle that is affordable and that you can pay off successfully. You may receive a higher interest rate to start. Shop around for the best rate, and keep in mind that once you have raised your credit scores, your next interest rate on a loan will likely be lower.

Beware of Credit Repair Services

You may receive offers from credit repair services promising to help repair your credit. Make sure you thoroughly investigate these services before you use them. Their fees can be expensive. There are many ways you personally can rebuild your own financial future for no cost (compared to services that charge). In this case, DIY is often best.

Know Your Limits

Again, once you begin re-establishing credit, it is crucial to know the limits on your credit cards and to keep your balances well below them. You may have a very low limit due to your credit history. That’s okay. Use your cards sparingly and continue paying the bill on time.

Do Not Close Accounts

You may think you’re doing the right thing by closing lines of credit and swearing off all credit cards. This action does far more damage to your credit than you think. Closing accounts reduces the amount of credit you have available to you. This leads to lower credit scores. It’s best to keep the credit lines open. If you’re tempted to spend, cut up the card.

The most important lesson to learn is to be patient. The road to bankruptcy did not happen overnight. And neither will the road to improving your credit. By following the guidelines above, the road to a better financial future and improved credit score is possible.

If you have a situation with credit card debt, or are considering bankruptcy, perhaps you should consult with Carolyn Secor.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.

Working with Your Bankruptcy Attorney

Wednesday, January 14th, 2015

Bankruptcy is an extremely traumatic time. We want the experience to be as painless as possible. Therefore we have some suggestions on howBankruptcy attorney to deal with your bankruptcy attorney.

Provide as Much Detail As Possible

The typical bankruptcy filing is about 40 to 60 pages long.  Why?  Because there is a ton of information required by the bankruptcy court.  Information on income, expenses, assets, debts, transactions, etc.  The information that is disclosed needs to be as detailed as possible.  If you have a 2005 Chevy Suburban let your bankruptcy lawyer know as much as detail about it as you can.  How many miles does it have?  Is it the LS model?  Is it four wheel drive?  Does it have mechanical problems or body damage?

When you disclose your income provide all of the documentation requested.  If your attorney asks for 6 months worth of paystubs don’t provide 5 months and 2 weeks worth.  Provide 6 full months worth.  It may seem like a big hassle (and actually it usually is a big hassle to gather all of the needed documents) but the more detailed you can be generally the smoother your bankruptcy case will go.

Don’t Hide Anything

Disclosure is the name of the game when it comes to bankruptcy.  Here in Arizona there are about 30,000 to 40,000 bankruptcy cases filed per year.  Obviously with that many families filing for bankruptcy the court cannot personally visit each home and take an inventory of your assets.  Because of this the system relies heavily upon you fully disclosing your assets and provides harsh penalties for failing to disclose (i.e. you can actually go to jail).

Tell your attorney everything.  Your bankruptcy lawyer does this day in and day out.  Let him decide what is important and what is not.  Your job is to disclose everything and then let your attorney sift through it.  Too many times I have clients that will disclose something right before the filing of their case (or even worse something is disclosed shortly after the filing of the case) because they didn’t think it was that important.  If you haven’t gone through the process before you may not be fully aware of what is important and what is not.  When it doubt, disclose…actually, just disclose period…doubts or no doubts.

Don’t Ask Your Attorney to Lie for You

This tip goes along with disclosing assets.  Don’t ask your attorney to lie for you.  Some people mistakenly believe that because there is an attorney/client privilege that their bankruptcy attorney will help them in concealing assets.  It ain’t gonna happen.  On rare occasions I have people tell me about an asset and I let them know they will lose it through the bankruptcy process.  This is then followed up with the question “well, how will the court even know about it?”  I then respond by saying “well, because you just told me about it and I am going to disclose it.”  This is followed by some awkward silence.

There are a million reasons to be completely accurate in your bankruptcy filing.  It is a crime not to.  You can lose your discharge.  Your attorney can lose his/her ability to practice law.  And on and on.  You know you have to disclose everything.  Just be prepared for it and understand that the more you disclose the better your bankruptcy lawyer can protect you.  The times when my hands are tied is when something is disclosed for the first time well into the case.  At that point there may not be anything I can do.

Communicate Changes in Your Life to Your Attorney

Communication with your lawyer is vital to a successful bankruptcy.  This is especially true in a chapter 13 bankruptcy.  Chapter 13 bankruptcy cases last anywhere from three to five years.  During that time any changes in your income or expenses can greatly impact your case.  I have had chapter 13 clients who have nearly had their cases dismissed because they have had a drop in income and can no longer make the required monthly chapter 13 plan payment.  Too often they come to me after-the-fact where if they would have let me know when things got bad I could have alleviated a lot of worry.

Regardless if you are in a chapter 7 bankruptcy or a chapter 13 communicate with your lawyer.  If you want to sell something, run it by your bankruptcy lawyer first.  If you need a new car, talk to your lawyer.  If you lose your job, shoot them an email.  Often clients deal with a lot of stress and needless worry that could be taken care of if it was shared with their lawyer.

Don’t Loose Your Cool

Bankruptcy can be a stressful. It also happens to come at one of the most stressful times of your life – when you are dealing with financial chaos.  Bankruptcy is meant to bring some order to dealing with your debts.  As soon as your case is filed with the court an order is issued that stops all collection efforts against you.  However, even while you are in bankruptcy there can be pressures from the court, your bankruptcy trustee, and even your creditors.  The thing to remember in bankruptcy (and in most court proceedings) is that things rarely happen quickly.  If you have a trustee or a creditor that raises an objection you will have an opportunity to respond to it before anything happens.

Let your attorney shoulder these pressures.  Trust me, your lawyer will let you know when they need your assistance in gathering documents or whatever else is needed to keep your bankruptcy case on the right track.  Often I have clients who completely lose their minds over something they receive in the mail from the court and then when they call me they learn that what they received was just a routine part of the process.

Be detail oriented.  Disclose everything.  Don’t expect anyone to lie for you.  Communicate.  And don’t freak out.  These five tips will help you, help your attorney, and help you get through the bankruptcy process as smoothly and stress free as possible.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida.  For more information, go to our web site
or call (727) 254-1704.