Posts Tagged ‘bankruptcy’

Credit After Bankruptcy? Seriously?

Wednesday, July 1st, 2009

Have you been through a bankruptcy? Think you’ll never qualify for credit again?

Well, don’t think like that … of course you’ll be able to get credit (you always will be)! How, you ask? Well, a number of banks offer “secured” credit cards, in which a debtor has to put up a certain amount of money (as little as $100 in some cases) into a separate account at the bank to guarantee payment. Usually the credit limit is equal to the security given, and is slowly increased as the debtor proves his or her credit-worthiness. Two years later, debtors are then eligible for mortgage loans on the same level as those with normal credit (who have never filed for bankruptcy).

The size of your down payment and the stability of your income is much more important than the fact you filed bankruptcy in the past! Although the fact that you filed for bankruptcy will stay on your credit report for 10 years, it will become much less significant the further in the past the bankruptcy date is.

Plus, you’re probably much less of a credit risk after your bankruptcy than before it, when you were struggling to pay all of your growing bills! This should give you some hope for the future. Good luck!

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Credit Reports After Bankruptcy

Friday, March 13th, 2009

Bankruptcies can be reported on a credit report for 10 years from the filing of the case! And to top this off, if you file a bankruptcy and then voluntarily dismiss it before the discharge, the credit reporting agency must report the dismissal as well as the bankruptcy filing, which means you’ll have to wait even longer to clear things up.

Now after those long years are behind you, and assuming you now have a decent income, you should be much more creditworthy after a bankruptcy than you were before it, since your old debts no longer have a claim on your future income.

The Fair Credit Reporting Act makes it clear that a debt discharged in bankruptcy must be listed as having a 0 balance. FTC OSC section 607, item 6 states: “A consumer report may include an account that was discharged in bankruptcy (as well as the bankruptcy itself) as long as it reports a zero balance due to reflect the fact that the consumer is no longer liable for the discharged debt.”

After the discharge is complete, you will now be entitled, under federal law, to have the balance of each discharged debt reported as “O”. The history of delinquencies can be reported, however, but the balance must now show as zero. If it is not, dispute the debt (you will win in this case).

Important to remember: negative history on your credit report is just that — history. It does not doom you to everlasting credit rejection, but it should, at least, challenge you to strengthen your financial present by saving and using credit carefully now.

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The Goals of Bankruptcy

Thursday, February 26th, 2009

To file bankruptcy of any type, it is important to talk to your attorney about the process first. They will help determine if you qualify for filing bankruptcy or if you may need to work through other forms of repayment instead. Many businesses will qualify for this type of business bankruptcy. Chapter 11 is designed to provide help for debtors that have a limited liability, corporation or partnership. With the help of your attorney, you can determine the best route to take.

To file chapter 11, your company will need to file a voluntary petition with the court. This petition is designed to explain your situation and to outline what your goals are. For example, all assets and liabilities are outlined. In addition, a statement of financial affairs is considered. Filing this is a mandatory element because it will outline your financial status and provide the court with information on whether or not they should consider filing bankruptcy for you.

The goal of filing this type of bankruptcy is to adjust, and then reorganize, the debts that you have that relate to the business, the business’s property or other assets. The goal is not to close the business, nor is it to have the business go under. Rather, the goal of Chapter 11 is to reorganize the obligations you have so that the business can continue to operate. During the process, the debtor, or business owner, will remain in possession of all of your property and you, with the help of your lenders, will develop a plan to keep the business functioning so it generates money to help repay the debts.

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