Credit Repair Articles » Bankruptcy

Signs that You May Need Professional Credit Counselling

bbcred — Mon, 23 Aug 2010 01:09:01 +0000

When facing bad credit, a lot of consumers immediately consider bankruptcy, thinking that there is no other way to resolve their debt problem. But before taking any drastic step, why not first get help from a trusted credit counseling agency?

Listed below are signs that you may need to acquire professional credit counseling service:

Creditors are calling you to collect payment. Do you receive constant calls from your creditors reminding you about your past due debts? If yes, then obviously, there is a problem going on. Remember that hiding from your creditors will not resolve anything. Instead, ignoring the true status of your debts only aggravates the problem.

As you skip your monthly payments, your debts continue to accumulate because of interest rate charges and late fees. If you don’t act fast, there might be no other option left but bankruptcy. Speak with your creditors and negotiate your debts. If you feel like you cannot negotiate it on your own, a credit counseling agency can help you.

Your monthly salary is not enough to cover for your expenses. Do you find that your monthly earnings barely cover for your expenses? If yes, there is a risk that you overlook your repayment duties to your creditors which can lead to more debt. Seek help now, before things get too complicated.

You need to use your credit card in order to get by. If you have to pay for your groceries and daily needs with your credit card just to get them, then obviously, you are facing financial disaster. Keep in mind that if you fail to pay your monthly balance in full, you will immediately incur the additional interest rate cost. Even worse, if you fail to submit your payments in two months, your credit card issuer can increase your interest rate.

You need to take out a short term loan to pay for another debt. If you have to borrow money to pay another creditor, then you are already in the middle of a serious debt situation. Keep in mind that short term loans and loans for bad credit usually carry high interest rates. If you fail to pay back the loan on time, you will be facing an even bigger problem.

Money matters get in the way of your personal relationships. Behavioral issues such as compulsive shopping and gambling can sometimes be the real cause of financial crisis. A professional credit counselor will not only teach you strategies on how to get out of debt but will also be able to help you cope from a behavioural issue which can bring a long term relief from bad debt.

Seek Help Now!

Indeed, you don’t need to wait until your debt situation worsens before seeking out credit counseling. It is not true that if you take credit counseling, your credit history will be affected. In fact, if you are struggling with debt repayment or you’re not sure of how to manage your finances effectively, it’s best to seek help now before it’s too late.

About the Author

Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit loans and bad credit cards to people with bad credit.

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Tips on How to Rebuild Credit after Bankruptcy

bbcred — Mon, 19 Jul 2010 02:52:53 +0000

A lot of us are very much concerned about our credit standing. After all we know that our financial prospects in the future largely depend on our credit report.

A bad credit report reduces your chances of getting low interest loans. It can also mean the disapproval of your application for car loans, mortgages and debt consolidation. How much more if you have a bankruptcy mark on your credit records!
A bankruptcy record in your credit report not only influences your current credit standing. It is usually retained on your credit file for a minimum of seven years. This means that you will have a very difficult time locating lenders willing to provide you credit lines. And you have to bear this difficulty for a very long time. You have to wait for seven years before your bad credit report will be finally dropped.

But you don’t need to wait that long to start repairing your credit history. You can rebuild your credit even after bankruptcy. But how? What should you do to regain your credit worthiness? The answers to these questions will be given in the remainder of this article.

Tips on How to Rebuild your Credit
Though you cannot remove bankruptcy in your credit report, you can do something to gradually improve your credit history. We have provided some tips that you can use for you to fully regain credit worthiness.

Obtain your credit report. You can do this by contacting any of the three credit report firms. These consumer credit reporting agencies are Equifax, Experian, and TransUnion. You can order your free annual credit report from Annualcreditreport.com. But if you have taken your free report already, you will be required to pay a nominal charge. Why should I obtain my credit report?

To review your credit report. Look at the details of your debts. Check your personal information. If you find any errors or misprints, file for a dispute with any of the three credit report firms. This will prompt them to re-evaluate your credit record and provide you a more accurate one. In so doing, you can validate your credit standing.

Seek professional assistance. There are lots of non-profit organizations that provide free credit repair service. Take advantage of this program. Tell a counselor your desire to regain your credit worthiness. The credit counselor will surely help you devise plans on how you can do so. Because your debts may be cleared off due to bankruptcy, he can help you avoid falling into debt traps. The counselor can also advise you on how you should manage your finances.

Make a conscious effort to avoid debts. The advice you receive will prove to be ineffective if you will not change the way you spend. So, be determined to avoid incurring additional debts. Make your own budget and be sure to stick to it. This way you can apply what you have learned about money management. Soon, you will be able to thoroughly repair your credit history and receive better credit scores.

Yes, there is life even after bankruptcy. All you have to do is to follow the tips provided in this article and soon you can successfully rebuild credit.

About the Author

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Three Proven Techniques for Car Loan Approval after Bankruptcy

bbcred — Fri, 16 Jul 2010 04:06:14 +0000

Bankruptcy is often equated to reduced options. After filing for bankruptcy, a person will certainly find it difficult to get excellent credit deals. He cannot get low interest loans and flexible payment terms. He will just be offered very minimal funds for credit. He cannot negotiate for a reduction in fees and charges. After all lenders will only find him a great credit risk. All of these issues can be attributed to the person’s record of bad credit report.

But bankruptcy is not the end of your credit history. There are a lot of great financial prospects in the future if you can successfully repair your credit standing. All you need to do is to prove to lenders that you are no longer a credit risk. How can you do this? One way to accomplish this is to get approved for a car loan.
Once your debts has been discharged, you can immediately apply for an auto loan. This will be the first vital step in regaining your financial health.
But what should you do to instantly get the approval for a car loan? We have provided three proven techniques that will help you get a car loan, even with a bad credit report.
Techniques for Car Loan Approval

Know the requirements and guidelines of lenders. Even with a bankruptcy record in your credit report, you can inquire about the requirements for an auto loan. Ask a potential lender about the guidelines they have car loan programs. Tell the lender upfront that you have had bankruptcy. Then ask them what will be requirements for you to secure an excellent auto loan. This way you can acquire direct information on what you need to prepare in order to get a potential car loan.
Know your credit standing. You can easily obtain a copy of your credit report from any of the three credit reporting agencies. Once you have obtained your copy, scrutinize the content of your report. Review your payment transactions. If you have seen erroneous late reports for debts that you have already settled, file a dispute. This will inform the three credit reporting firms to re-evaluate your credit standing. You will surely receive better credit scores once the errors on your report have been removed.

Also be sure to bring your credit report if you visit a potential lender. This will show them that you are knowledgeable about your credit standing. This also sends a message that you are less susceptible to agree to their negotiating tricks.

Consider refinancing. Once your car loan has been approved, be alert about future refinancing options. Always make on time payments on all your credit charges. In the end, you can be eligible for significantly lower interest rates. In three years time, you can thoroughly improve your credit score and qualify for even lower rates of interest.

By following the techniques enumerated in this article, you can surely rebuild your credit. Soon, you will realize that you are able to regain your credit worthiness, thanks to the car loan you applied for.

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Some Basic Information on Chapter 7 Bankruptcy

bbcred — Mon, 05 Jul 2010 05:42:09 +0000

Filing for Chapter 7 bankruptcy is a very serious matter. You must consider a lot of things for you to arrive at a sound decision. After all, your final decision will greatly influence your credit standing.

Nevertheless, there are a lot of benefits in filing Chapter 7 Bankruptcy. You can free yourself from any credit worries. You will also reduce, if not totally eliminate, your debts. And most importantly, you can have a fresh start for you to rebuild your credit history.

Still, before taking this step, you must analyze if this type of bankruptcy really fits your situation. You also need to know much about the characteristics of this type of bankruptcy. This way you can be assured of enjoying the benefits that this option can provide you.

Now, allow us to discuss the features and some basic information about Chapter 7 Bankruptcy.

Features of Chapter 7 Bankruptcy
An individual or a business can file for Chapter 7 Bankruptcy. The court proceedings, for this type of bankruptcy, usually last three to six months.

This type of bankruptcy is otherwise known as liquidation. This is because your non-exempt properties will be taken and sold to pay off some of your debts. What is the meaning of exempt and non-exempt properties?

Under the state and federal laws, properties classified as exempt are the things you can still own even if you file for bankruptcy. These properties include your clothes, car, household furnishings, and others. Non-exempt properties on the other hand are those that will be taken from you. They will be sold to get enough cash to pay for your credit. Still, most of the people who file Chapter 7 Bankruptcy were pleased to learn that almost all their properties are classified as exempt.

In liquidation, all your unsecured debts will be totally erased from your credit information. However you will still need to settle non-dischargeable credit. Non-dischargeable debts are the obligations that survive bankruptcy. This means that you will still be required to pay them, as they are not covered under your unsecured debts. Non-dischargeable obligations are composed of alimony, child support, student loans, secured credit and tax debts.

Word of Caution
Despite the good features of Chapter 7 Bankruptcy, not everyone can be approved to get this debt option. If you have much disposable income to repay your debts, you will not be allowed to file Chapter 7 Bankruptcy.

If you want to file for bankruptcy, you must explain before a court why you are taking this step. You should present the reason why you will not be able to repay your debts now or in the future. Some of these reasons may be a recent job loss, a debilitating illness, or a mitigating reason that will prevent you from completely retiring your credit.

The new bankruptcy law also requires filers to undergo credit counseling. You can take this online or over the phone. This two hour credit counseling usually costs more or less $50. After taking this session, you should include your certificate of completion in the documents you will be presenting to the bankruptcy court.

We hope that this article enlightened your mind about the features and basics of Chapter 7 Bankruptcy.

About the Author

Elizabeth Roberts is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit loans and bad credit cards to people with bad credit.

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Chapter 13 Bankruptcy 101: Basic Information about Reorganization Bankruptcy

bbcred — Thu, 24 Jun 2010 02:38:54 +0000

You must have heard or seen much about Chapter 13 bankruptcy. After all, media portals have been frequently discussing things about bankruptcy, in line with the recent economic recession.

But we often find the information contradicting. An internet article may discuss the qualities of Chapter 13 bankruptcy, which will be refuted in a TV discussion. So which of them is correct?

To help you acquire the right information about this debt option, we have summarized the basics of Chapter 13 bankruptcy. Thus, we encourage you to read the remainder of this article.

Basic Information on Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is otherwise known as “wage earner” bankruptcy. This means that one of the requirements for this type of bankruptcy is a steady source of income. This is vital since a reliable monthly wage will be the only way by which a debtor can repay some or all of his debts.

Chapter 13 Bankruptcy is also known as reorganization. This option involves restructuring of debts. This allows an individual to use whatever income he may earn in the future just so he can pay off his creditors. This will be done under the supervision of the courts.

In Chapter 13 Bankruptcy, a debtor must propose a credit repayment plan. This plan details how he intends to pay his debts over a period of at least three years. Upon filing for bankruptcy, the terms of the debt will be improved. This change may constitute lower rates of interest or even no interest at all. After all the goal of the repayment plan is to help creditors regain a portion of the money they have extended for credit.

The value that you must repay depends on three things. First is your monthly income. Your repayment plan must be based on a realistic amount that you can pay each month. Second is the total money you owe. Your debt repayment plan shows how much of your original credit you can pay off in the next three to five years. Third is based on a consideration of your unsecured credit. You have to propose a value that is not very far from the payments you could have made if you filed for Chapter 7 bankruptcy. This way you can somewhat satisfy your unsecured creditors.

Who Files for Chapter 13 Bankruptcy?

Most consumers who do not wish to lose their properties prefer this type of bankruptcy. This is because they are allowed to settle their debts without repossession of assets. They just need to enter an agreement to retire their credit under a less pressured repayment program.
The federal laws also set credit limits for those who will file for Chapter 13 Bankruptcy. If you have incurred not more than $1,010,650 in secured debts and $336,900 in unsecured debts, you will be eligible to file for a reorganization bankruptcy.

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How to Spot Red Flags of Financial Danger

bbcred — Tue, 30 Mar 2010 06:59:30 +0000

A lot of people are facing financial debt because they refused to recognize the signs. In fact, there are usually warning signs that indicate the impending problem – bankruptcy. Do you know the major red flags of financial trouble? Check out the following:

Using your credit cards for everyday purchases. Are you using your credit to pay for the littlest items? Do you frequently charge unexpected prchased to your card? Do you find yourself charging necessities such as food, electricity, gas, etc. to your credit card? If so, then clearly there is an issue with your budgeting and you may be at risk of debt accumulation.

Making only the minimum payment. Do you prefer to submit only the minimum due payment required by your Issuer? If that’s the case, you are adding up burden to yourself. Keep in mind that carrying a balance in your account would mean additional interest rate fees that may range from 15% to as much as 20% from the original sum of your debt.

Not paying on time. Do you constantly skip your due dates? If you normally wait for your next bill or the disconnection notice before submitting your payment, then of course, you are putting yourself in trouble. Missing your payments would make it harder for you to keep up with your commitments, in addition to the late fees that you will incur.

You often get into arguments because of money matters. If the matter of debt or finances affect your relationships with your family and friends, then step back and examine your situation. It is never too late to seek out a solution to the problem. And through the support of your loved ones, it should not be so difficult to regain control over your finances.

You are not aware of the status of your debt. Are you aware of exactly how much you owe each of your creditors? Do you review your billing statements to make sure that all your charges are accurate? If you do not know what your real real debt situation is, then obviously you have not been paying much interest on your obligations. Eventually, this kind of practice could lead you to bad debt.

Borrowing cash from your credit card. Do you often take out cash advances from your credit card whenever you run out of cash? Credit card issuers typically charge a higher rate of interest on cash advances than the rate applicable to purchases or balance transfers. Remember that there is no grace period so the rate of interest is immediately included in your bill as soon as you withdrew the money.

Maximizing your credit limit. Do you tend to use your credit cards until you reach your alloted credit limit? Do you exceed your limit? If yes, then you could be living beyond your means.

You get calls and notices from your creditors. When you are beginning to get calls and notices from your lenders, reminding you about your past due debts, you may already be stuck in bad debt. If you don’t act now, you might end up with not much alternative but to declare bankruptcy. Do not delay. Analyze your situation immediately, make adjustments and work towards a solution.

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A Closer Look at Loans For Bad Credit

bbcred — Tue, 23 Feb 2010 01:43:24 +0000

Whether you might have just been discharged from bankruptcy or struggling with bad credit, a bad credit personal loan might be the assistance you need. Given that not every loan company will be willing to give you a loan, taking into account your unfavorable credit ratings, the only route to get an approval is to apply for a subprime loan.

This post discusses the nature of loans for bad credit and how obtaining one can help you in repairing your credit history.

What’s Your Score?

Even though you have a history of bad credit does not mean you shouldn’t make an effort to check your credit report before applying for a loan. Get a copy of your credit file from the three major credit reporting agencies (Equifax, Experian, and Transunion) so you can be aware of the exact status of your credit.

Focus on the details and ensure that there aren’t any error in your report. Remember that even the smallest mistake can hurt your score. Should you discover errors, contact the creditor involved to fix the problem. You must send a dispute letter to the agency that issued your report. You may have to wait up to 30 days before investigation can be completed and for your report to be corrected.

Being aware of your exact credit standing is vital especially when dealing with subprime loan providers. There are lenders who may attempt to offer you a higher rate than what you deserve simply because you have bad credit. When you know your real score, no lender can trick you into thinking that you have a lower rating than what is in your report.
Find the Right Bad Credit Lender

There are many financial firms out there that provide bad credit loans. One thing that you must review is the background and track record of the loan company. Is it a legitimate financial institution? Does it abide by the Lending Laws of your State? How long has it been providing financial loans to people?

Other lenders may require collateral from applicants with bad credit history. Nevertheless, you can also find lending companies that offer bad credit unsecured loans. If you do not have collateral to submit or are not comfortable with submitting collateral, you should seek out an unsecured bad credit loan.

In comparing loans for bad credit, the rate of interest is just one factor. Apart from the interest rate, take into account the repayment terms and the fees. Always try to negotiate with a prospective lender even if you have bad credit. Although you may currently suffer from a low score, you still deserve to be treated with dignity and fairness.

Rebuild Credit History

When you get approved, use your bad credit loan to rebuild your credit rating by prompt and consistent payment. To avoid being late, create a realistic repayment plan and stick to it. The moment you receive your pay check, set aside your loan payment and submit it to your lender on the same day.

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Avoid Bankruptcy Using Your Home Equity

bbcred — Sun, 31 Jan 2010 21:03:42 +0000

Did you know that declaring bankruptcy will not always release your from all your debts and obligations to your creditors? Since the New Bankruptcy Law took effect, the application process for bankruptcy has been made more complicated.

Under the New Law, an attorney cannot decide for you as to which type of bankruptcy you should seek. Even if you would like to aquire a Chapter 7 bankruptcy to be released from all your debts, it will not be for you to decide.

Rather, the bankruptcy court judge will be the one to decide whether you are qualified for a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. To be discharged from all debts, you need to get a Chapter 7. To start with, you must take the “Income Means Test” to determine if your present income enables you to handle repayment. If you pass the test, you can file for a Chapter 7 Bankruptcy. If you fail, the judge will require you to file for a Chapter 13 bankruptcy which will put you under a mandatory repayment program.

A Chapter 13 bankruptcy will subject you to a mandatory repayment program. Yes, you will still be accountable to pay your creditors under a repayment plan which lasts up to 5 years. Under the bankruptcy provision, your creditors can only impose a maximum interest rate of 10% to your debts. A certain percentage (depending on your salary range) will be automatically deducted from your monthly wage and sent to your creditors as payment.

Avoid Bankruptcy Through Home Equity

With the changes made in the New Bankruptcy Reform Act, you might want to seriously think about the pros and cons of your actions before going through the process bankruptcy.

In addition, the New Bankruptcy Law requires all applicants to undergo and complete a credit counselling course with an accredited agency at least six months prior to filing. Your credit counsellor can help you find an alternative solution to your problem, one that best fits your situation.

Rather than file for bankruptcy right away, have you considered other alternatives to recover from your debts? For instance, you may take out a Home Equity Loan so you can pay off your debts one step at a time.

Taking out a loan from your home’s equity loan gives you the chance to pay your creditors right away and stop your debts from further accumulating. True, there are still risks involved since you can lose your property if you fail to keep up with your loan payments. Nevertheless, you can ask advice from a trusted credit counsellor on how you can come up with a repayment plan that will help you get out of your debts and complete your home equity loan payments on time.

Furthermore, before obtaining a home equity loan, find a lending company that offers a low interest rate and a flexible repayment term. Carefully check the Terms and Conditions before signing up your loan contract.

About the Author

Liz Roberts is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit loans and bad credit cards to people with bad credit.

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Bankruptcy: How Does the Trustee Work?

bbcred — Wed, 20 Jan 2010 18:56:00 +0000

Before filing for bankruptcy, it is important to clearly understand how the process works. This article focuses on the role that the trustee plays in the different Chapters of bankruptcy.
What is a trustee?
The trustee is appointed by the committee of the United States Trustee Program to represent the creditor. The Trustee sees to it that borrower gets through the bankruptcy procedures without any complications.

The trustee performs varying duties, depending on the Chapter of Bankruptcy filed. For example, he may be in charge to oversee the liquidation of the assets and distribute the proceeds to corresponding creditors.

Let’s discuss the trustee’s role in each of these three types of bankruptcy:

Chapter 7 Bankruptcy
A borrower who qualifies for a Chapter 7 Bankruptcy usually do not have assets that can be used for liquidation. If there are properties, the Trustee will be the one to supervise the liquidation.

The trustee must make sure that the borrower properly cooperates with the ruling of the bankruptcy court. If the borrower commits fraud or any act of perjury, a trustee can refuse the complete discharge of the debts.

Chapter 13 Bankruptcy
The Chapter 13 bankruptcy subjects the borrower under a mandatory repayment program. It is the trustee’s duty to ensure that the borrower is keeping up with the repayment program.

The trustee must make sure that the corresponding creditors are paid on time. The trustee must also be present in the court during sessions.

Chapter 11 Bankruptcy
Under Chapter 11 Bankruptcy, the Trustee will appoint an official committee that will be in charge to keep financial records, see to it that the schedules are followed, and conduct an investigation in case fraud or abuse is suspected.

Although the trustee primarily represents the creditor, it is also his duty to assist the bankruptcy applicant with the whole procedure. The trustee must also give the necessary advice on financial management.

Borrowers must cooperate with their designated trustees to avoid complications in between the bankruptcy process. Always keep in mind that the trustee has the power to refuse your claims should you fail to follow the process accordingly.

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Filing for Bankruptcy – The Advantages and Disadvantages

bbcred — Mon, 14 Dec 2009 00:18:49 +0000

In this article, let’s take a closer look at the pros and cons of bankruptcy and how it should affect your decision on whether to seek bankruptcy or not.

The Pros of Bankruptcy

When bankruptcy is filed for the right reasons, it can have advantages or benefits to an individual.

First, it releases you from the pressure and stress of having creditors constantly obliging you to pay.
Some creditors are known to harass borrowers and such harassment can rob you of your privacy and peace. Once you have filed for bankruptcy, all creditors are prohibited from trying to contact you in any way or pursue any kind of debt collection practice. This will certainly give you peace of mind and relief.

If you do get approved for a Chapter 7 bankruptcy, you will be set free from all debts you have with your creditors. This means, you can have a fresh start again and live a life free from debts.

In case you do not qualify for Chapter 7, a Chapter 13 bankruptcy would put you under a bankruptcy repayment plan where you will be required to submit a certain percentage from your monthly wage as payment for your debts.

Even if a Chapter 13 doesn’t completely exempt you from your debts, going through a bankruptcy repayment plan can still be a great help in managing your debts.
The Cons of Bankruptcy
Are there disadvantages to filing for bankruptcy? What consequences will you be facing if you choose to file for bankruptcy?

Primarily, a bankruptcy record is a derogatory mark that will remain on your credit report for seven years. Imagine how potential employers, landlords, insurers and future creditors would react if they see that you have just been through bankruptcy. Although your credit rating and credit status can be improved over time, the road to recovery is a slow process.

Going through a bankruptcy procedure also requires money and a great deal of your time. Today, you need to hire a bankruptcy lawyer to prepare your bankruptcy documents for you. Although there are bankruptcy lawyers who ask for a small fee for their services, usually your best bet would be to hire someone who asks for a considerable service charge.

After filing for bankruptcy, are you guaranteed to get an approval? Under the new bankruptcy law, one needs to pass the “Income Means Calculation Test” to determine whether he will be eligible to file for a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. In case you do not qualify for a Chapter 7, take note that a Chapter 13 will still put you under a five-year debt repayment program.

Nevertheless, a Chapter 13 repayment plan would be more affordable for your budget.

Should Your File for Bankruptcy?

Your credit counseling agency should be able to help you decide whether filing for bankruptcy is really for you. If your credit counselor suggests that you take on the alternative steps instead, then be cooperative. Be prepared to take on the challenge of getting out of debt without resorting to bankruptcy.

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