Post-Bankruptcy Credit Report Errors
Published Thursday, July 9, 2009 @ 2:48 pm
Coming out of bankruptcy is a great milestone. It renews confidence, offers comfort and provides you with a sense of accomplishment from meeting a tough challenge head on and surmounting it.
Like most people who have experienced these emotions, you have comprehensive understanding of how to better control your spending and look out for your financial well-being. One component of that is learning to identify common credit report problems that arise after bankruptcy.
Look for a record of credit agency activity that is listed separately from the debt they tried to collect. This makes it appear as if you had two outstanding debts. The original debt should have been discharged as a result of your bankruptcy and thus, the agency should not appear on the report. This is a very frustrating component of a post-bankruptcy credit report because a bankruptcy eliminates debts with organizations to which you owe money but does not eradicate the record of the debts. In other words, it’s a two-step process: removing the debts and reporting that they were removed. Parts of the second step often fall through the cracks.
Another common reporting error involves accounts that were reported closed by the creditor instead of it being closed by you. This would indicate that a creditor shut down the account instead of it being done as a result of a bankruptcy, intimating that it was done outside of your control because of your inability to pay. If a closed account appears open and the payment history demonstrates a clean record, leave that one alone because it will help.
We’ve said on the blog many times but it bears repeating: make sure your credit report looks good at all reporting agencies. It’s very possible that one bureau reports a solid history and the other still shows bad debts. It is also crucial to ensure any existing debt is correctly reported by all agencies.
One technique for proving credit report accuracy after a bankruptcy is to compare your report with your bankruptcy paperwork. Look at discharged debts and then what is listed on your credit report. This is bare-bones way to rest comfortably that your information is being handled the right way and won’t derail any future loan plans, such as a mortgage or student loan.
One last bit of advice: Do not turn to a credit repair business to repair mistakes in your credit report. These are businesses that charge a hefty up front fee, promising to improve your credit score quickly. As someone who took the initiative to contact an attorney, gather your wits and decide that bankruptcy was the best option, you can repair your credit on your own. With some time and a little bit of effort, you can rebuild your credit.
From: The Law Offices of John T. Orcutt. Helping thousands of families with the power of bankruptcy. Call 1-800-899-1414 to set up a free initial debt consultation.
Holding On To Your New Found Financial Freedom After Bankruptcy
Published Thursday, May 28, 2009 @ 7:50 pm
So you did it. You came to the difficult realization that you needed bankruptcy protection, you got through the process, and you received your discharge. First off: Congratulations! This is a very good thing. The mountain of bills that had been dragging you down for so long is gone — along with all the stress and anxiety of fending off the creditors who were trying to collect on those bills. You get to start over, free and clear.
Your next step is to take advantage of this unique opportunity. Whatever the reason for your bankruptcy, your immediate focus should be doing what you can to rebuild your credit and maintain your new found financial stability. Here are some ideas on how you can make the most of things after bankruptcy:
The first thing you should do is get a copy of your credit report. Review the report to make sure the debts included in your bankruptcy are listed as discharged. Once you’ve done this, consider getting a secured credit card to start rebuilding your credit. This is a credit card that requires you to put down a cash deposit equivalent to the credit line on the card. Because you have to put down a deposit, there’s usually no problem in qualifying. And most secured card issuers report your payment history to the credit bureaus, but do not report that the card is secured.
Remember, however, that the purpose of obtaining new credit is to rebuild your credit score, not to start carrying debt again. You should pay off any credit card balance every month. The bigger goal, though, is to live on a cash basis as much as possible. Think of adopting the general motto that if you can’t afford to pay for it in cash, don’t buy it. This means you need to create and commit to a realistic budget — one that does not require the use of credit to work. Part of this budget should include a savings plan. If you can create a cash cushion for yourself, you’ll be better positioned to handle unexpected expenses without having to take on debt.
The idea is simple, yet powerful: live within your means as best as possible. This will help you avoid getting drawn back into the debt cycle. And, it’s liberating: when you buy something, it’s yours – period. No doubt, it’s difficult to stick to this kind of lifestyle, but it’s doable. And there are things you can do to make it easier. Reduce your day-to-day spending. Cut out that fancy coffee from Starbucks. Bring your lunch instead of buying out. Eat dinner at home more often. Wait for things to go on sale, or try to find generic brands. Also, look for cheaper forms of entertainment: instead of going to the movies or the amusement part, go to the beach, a public park, or a free outdoor concert.
If you maintain this lifestyle, you’ll find your credit rating will quickly improve. After just a couple of years, you should be able to take out credit for larger purchases, where it’s usually necessary, like for car loans and mortgages – and at competitive rates.
The point of all this is: Enjoy the financial freedom of life after bankruptcy, and do what you can to hold on to that freedom.
The Law Offices of John T. Orcutt, with convenient office locations in Raleigh, Durham, Fayetteville, and Wilson. Call (toll free) 1-800-899-1414, to set up a free, confidential debt consultation. Visit www.billsbills.com for more information.
After a Bankruptcy: Enjoy a Fresh Start, Be Smart!
Published Wednesday, April 15, 2009 @ 1:08 pm
It wasn’t easy to come to the realization that filing bankruptcy was the right solution for you. You agonized over the decision, struggled with the shame and embarrassment of not being able to pay all of your monthly bills, worried about eviction, foreclosure, repossession, lawsuits, and exhausted by all of the stress. But after learning the facts about bankruptcy, you made the important decision to hire a lawyer and move forward with your life by seeking the protections of bankruptcy law.
Bankruptcy is designed to give people a new start in life. Filing bankruptcy can be the beginning of a true financial and emotional health success story. Once you’ve made it through the process, a huge weight will seem to be lifted from your shoulders. You can breathe a deep sigh of relief. Life can feel good again. Now you have the opportunity to develop new skills and habits that will make you stronger financially and emotionally. You can learn new ways of managing your money to create a stable and fulfilling life.
The period following bankruptcy is a critical time in which you can take control, and stay in control of your life. But, without proper attention and planning, you could also find yourself slipping back into the familiar patterns that may have gotten you into financial trouble in the first place. It is crucial to your financial recovery that you change the way you think about money. Here are a few steps that will help:
Find at least one person that you can talk to about your finances. It could be your spouse, a friend, or parent. They don’t need to be experts. Just have someone with whom you can be honest and open about your concerns and fears, or to celebrate your successes with. Being able to ‘bounce ideas off’ another person will help you think through your ideas and plans, and possibly help you address issues that you hadn’t thought of.
Choose your social and media influences carefully. If your friendships heavily stress ‘things’ or a lavish lifestyle, it’s time to reassess those relationships. Likewise, don’t watch or listen to television shows that show luxury living you can’t afford. Same goes for your children, if you have them. Unethical marketing tactics are constantly targeting innocent children who are notoriously vulnerable. Even seemingly ‘innocent’ shows teach children that they must have certain things or wear the ‘right’ clothing in order to ‘fit in’. Brainstorm to find new ways to be entertained or spend time together other than in front of the TV or at the mall.
Start saving, even before you’ve paid off all your bills. You may feel anxious about incoming bills after bankruptcy and long to be debt free. But while throwing all of your income at debt might make you feel better today, it may not be such a good idea in the long run. You need to start saving some of your money now, even if there are still some outstanding debts you’re paying on. Having a savings ‘cushionâ€, will give you a feeling of abundance: you actually get to “keep†some of your earnings. Saving will help you avoid using credit in the event of an emergency. Cars eventually need repairs, appliances give out, dentists are necessary. Having cash on hand in these situations could make all the difference to your post bankruptcy success.
Bankruptcy is a powerful tool to put you on the path to financial freedom. By playing it smart after bankruptcy, you can truly enjoy your fresh start.