2013 March 27 by jesse
Last night we held our second Credit Repair and Home Ownership After Bankruptcy Seminar. Kevin J. Kust, Regional Manager at Continental Credit, LLC was our main presenter. He gave an informative talk about what factors make up your FICO score and strategies for re-establishing credit after a bankruptcy.
Here is Kevin’s top 10 list of how to re-establish good credit after a bankruptcy:
- Re-establish credit ASAP starting with opening 1 Secured Credit Card. After another 2-3 months get another secured credit card. Installment loans are great to, but credit cards are most important. (even clients in an active chapter 13 bankruptcy can get approved and are able to open a secured credit cards as long as they are very low limits – have to be under $1000 limit.)
- After opening a secured card never exceed 30% of your available limit on each individual card. Better yet, use these cards for only a few dollars every month and simply make your on-time payment to show you are keeping the account active and you are being responsible by not putting excessive debt on the account & you’re paying it on time.
- Stay away from offers/solicitations in the mail – OPT OUT of these offers by calling 888.567.8688.
- Do not apply for department store or jewelry accounts to re-establish credit history. Secured credit cards are more versatile and ensure to grow your score with all 3 credit bureaus
- Open a secured installment loan with your local bank (however make sure you have at least 6-8 months of reestablished secured credit card history first)
- Your Checking/Savings accounts do not help re-build your credit profile.
- 90% of all Bankruptcies report INACCURATELY to the credit bureaus (i.e. accounts involved in the BK still show outstanding debts or do not appear to be involved in the BK, etc.) Make sure your BK matches your declarations page and is reporting correctly on your credit report!
- Make sure all accounts from your bankruptcy report as “included in bankruptcy” and have a $0 balance associated with the account
- Monitor your credit. Pull a report every 4-6 months to ensure your accounts are reporting correctly.
- Talk to an expert. Call Kevin J. Kust – Regional Manager at Continental Credit Restoration (ph. 303.868.0373) for a free analysis on your credit profile and potential options to remove some of the Bankruptcy from your credit report. Under the Fair Credit Reporting Act Bankruptcies CAN affect your scores for 7-10 years, but this DOESN’T mean that they HAVE TO. Bankruptcies can and have been removed from credit profiles given the right circumstances. Call Mr. Kust to find out how.
2011 June 10 by jesse
If you’ve filed for bankruptcy or are contemplating it, you may be wondering how it will affect your ability to get student loans and other financial aid. The good news is that there are still options available for borrowing money after bankruptcy. The bad news is that it’s a bit more complicated with a bankruptcy situation. Here’s the scoop on the different types of financial aid and how they’re affected by bankruptcy.
Federal loans, such as Stafford and PLUS (loans for parents), are the largest providers of financial assistance for higher education. Because the government encourages higher learning at colleges and universities, these programs are still available to those who have filed bankruptcy.
There are two subcategories within the federal assistance bucket – grants and loans. Grants are need-based or merit-based scholarships that don’t have to be repaid. They are based on either a special achievement of some type, such as academic excellence or athletic skill, or based on household income or hardship. Loans have to be repaid, but have lower interest rates and more flexible repayment schedules.
The good news is that bankruptcy is not a factor in receiving grants and loans from the federal government, providing your criminal record is clear. Your credit history and income are not factors in being approved for federal loans. However, if you’ve defaulted on a school loan in the past, this could affect your chances for receiving another loan.
A good place to start seeking federal assistance is filling out a Free Application for Federal Student Aid, or FAFSA. The FAFSA allows the school and the federal government to determine what kind of financial aid you are eligible for.
Unfortunately, private loans may not be an option for financial assistance after a bankruptcy. These programs are not regulated by the government and therefore have stricter criteria for approval. Private lenders typically look at whether there has been a bankruptcy within the past 10 years and may deny based on that.
A few exceptions exist, such as if the bankruptcy was the result of a natural disaster or extraordinary medical costs. And if the parent has filed bankruptcy, this should not affect on their child’s eligibility for private financial assistance (as long as parents are not cosigning).
Lenders also look at payout plans. Borrowers who filed for a Chapter 11 or Chapter 13 and had a payout plan will be more likely to get a private loan than borrowers who filed a Chapter 7. Lenders also look at whether the borrower is able to refile for bankruptcy – making Chapter 7 filers more attractive because they are unable to immediately refile.
Your first phone call should be to the financial aid department of the school you (or your child) plan to attend. It is not uncommon for bankruptcy filers to seek financial assistance and the experts will know the best options for your specific circumstances.
2011 March 17 by Staff
That’s not true. Think about it. By the time you come to a bankruptcy attorney, your credit is already either messed up or maxed out. And if it’s already messed up or maxed out, how can bankruptcy hurt it? The big surprise for my clients is when I tell them that filing bankruptcy can actually help them re-build their credit. Continue reading »
2011 March 17 by Staff
Not true. Most of the people who file bankruptcy are good, honest, hard-working people…just like you and me…who file as a last resort…after months or years struggling to pay the bills that were left over from some life-changing experience, such as a divorce, the loss of a job, a failed business venture, a serious illness, or some family emergency…or because they honestly and mistakenly fell into debt at a young age before they knew better… before they knew anything about budgeting or how to manage money.
2011 March 16 by Staff
One of the hardest purchases to make after filing for bankruptcy can be a car. But sometimes you simply need reliable wheels — whether it’s to replace a vehicle in need of expensive repairs or to use as transportation to and from a new job. And buying a car and making payments on time can be an excellent way to improve your credit. Continue reading »
2011 March 15 by Staff
Bankruptcy is not a taxable event, per IRS Publication 908. The protection you receive from creditors after filing bankruptcy applies to the IRS as well. So the amount of discharged debt cannot be considered part of your income, which would normally be taxable.The IRS states “Generally, when a debt owed to another person or entity is canceled, the amount canceled or forgiven is considered income that is taxed to the person owing the debt. If a debt is canceled under a bankruptcy proceeding, the amount canceled is not income.”