Winter Garden-Clermont-Orlando Bankruptcy Law Center
Ask Mark If Bankrupcty Will Help You Today
The credit card companies will hold you hostage. Do not let them ruin your life. Start over. Bankruptcy can help when you have no where else to turn.
Remember this. Article I, Section 8 of your United States Constitution grants you the ability to file for protection in Bankruptcy. Do not let the credit card companies keep you in debt. They will keep you in a debtor prison which was abolished when our country was founded.
Rebuilding Your Credit After Bankruptcy Bankruptcy has a long-lasting impact on a person’s credit rating, and on his or her ability to obtain credit in the future. The impact is not entirely negative. In some cases, filing bankruptcy may actually improve a bad credit rating. In addition, there are a number of steps a person can take to improve his or her credit after bankruptcy. An experienced bankruptcy attorney can offer valuable advice about how credit can be improved after a bankruptcy, and how to work for a better financial future.
Co-signed Loans Still another way to re-establish credit after a bankruptcy is to obtain a loan with a co-signor whose positive credit convinces the bank or other lender that the loan is a safe bet. As payments are made on the cosigned loan, the positive credit history affects both borrowers.
"Credit-Repair" Services One "credit repair" method to avoid after bankruptcy is seeking help from an unscrupulous "credit-repair service." Many consumers pay substantial sums of money to so-called “credit clinics” to "fix" their credit reports when, in actuality, only time can improve bad credit. A credit repair service or clinic can legally do nothing that a consumer cannot do on his or her own, for free. Some credit-repair companies actually encourage consumers to commit fraud by attempting to create a second identity. The Federal Trade Commission has investigated these often-fraudulent services and warns consumers to be wary of promises that seem shady or too good to be true.
Chapter 7
Central Florida Chapter 7 Bankruptcy Lawyer – Mark P. Cressman
What is Chapter 7 Bankruptcy?
Chapter 7 Bankruptcy is sometimes referred to as "liquidation bankruptcy.” It is a legal process by which most unsecured debts can be discharged, or wiped out. The filing of a Chapter 7 bankruptcy petition generally triggers an automatic stay in other litigation cases and creates a bankruptcy estate which is administered by the office of the United States Bankruptcy Trustee. It is generally known as liquidation because any non-exempt assets the debtor has may be taken by the trustee and sold to pay back a portion of the debt owed to the creditors of a petitioner. However, in most Chapter 7 cases, the debtor has little if any non-exempt assets. Thus there is generally no liquidation of assets and as a result most unsecured debts are discharged. As with all bankruptcy matters there are certain debts which cannot be discharged, and they include:
-
Certain Tax Obligations
-
Child Support Obligations
-
Spousal Support Obligations (alimony)
-
Student Loans
-
Debts Resulting from Fraudulent Activities
-
Debts Agreed to Be Paid Back as Part of a Settlement Agreement in Other Litigation
-
Debts Owed to Pensions or Profit Sharing Plans
-
Debts arising Out of Accidents in Which the Debtor May Have Been Intoxicated
-
Debts Arising Out of Larceny, Embezzlement, or Fraud
-
Fines, Forfeitures and Penalties Owed to a Governmental Unit
Who Can File Chapter 7 Bankruptcy?
To file for Chapter 7 bankruptcy, you must qualify under the Chapter 7 means test. The means test first compares your income to the median income in your state. If your income is lower than the median income in your state, you can file for Chapter 7 bankruptcy. However, if your income is greater than the median income in your state, you must then calculate the Means Test to determine if you qualify for Chapter 7 bankruptcy.
Discharge Results in an Improved Debt-to-Income Ratio
Most of the debtors who consider filing bankruptcy already have poor credit histories. Their credit ratings have suffered because of slow payments, late payments, repossessions, extended credit, charge-offs, foreclosures or judgments. After their bankruptcy, however, the discharged debts will no longer count against their income, so their credit may be better after the discharge than it was before. In addition, while a bankruptcy case will remain on an individual’s credit report for up to ten years; late payments stay on for up to seven years, so the effects are similar. Bankruptcy, however, gives consumers a chance to improve their credit faster because they will have an improved debt-to-income ratio after discharge.
Using Credit Cards Wisely
In some cases, individuals may be able to keep one of their credit cards even after bankruptcy. They may retain a card that they already have but that has no debt on it, or they may reaffirm a debt on a card, which means that they sign a contract with the credit card company after filing bankruptcy that says the debt will be paid anyway if the holder is allowed to keep the card. Some companies are willing to agree to this arrangement because they will be paid for the debt, whereas without reaffirming the entire debt could be discharged in the bankruptcy proceeding.
A secured credit card is another option for rebuilding credit after a bankruptcy. A secured credit card is issued by a bank, and is backed up by money that is kept on deposit with the bank that issued the card. The bank account is the security for the card. If the bill for the credit card is not paid on time, the bank may use the money in the account to cover the payment. The limit on the card can be increased by increasing the balance in the linked bank account. The issuers of secured credit cards report about their customers to the credit bureaus, just like the issuers of other credit cards, so any subsequent positive payment history will be available to future creditors. The interest rates for secured credit cards are often higher than the rates for non-secured cards, but they still can be worth the extra cost by virtue of the redeeming value of the new and reported financial stability.
Conclusion
In order to make the most of a bad situation, debtors must learn from bankruptcy and demonstrate greater financial responsibility in the future. A lawyer experienced in bankruptcy law is in a strong position to advise consumers not only before and during the bankruptcy process, but also after, guiding them through the necessary steps to improve their credit ratings and avoid future financial catastrophes.
DISCLAIMER: The information contained on the pages of this website is for informational purposes only. Nothing contained herein should be considered legal advice and no attorney-client relationship will or can exist between you and the lawyers of this firm until such time as you have signed a Bankruptcy Attorney Retainer Agreement. You should seek competent legal counsel for advice on any legal matter.