One of the main sources of unsecured debts for bankruptcy filers is credit card debt. Since the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was passed in 2005, more restrictions have been put in place to making a bankruptcy filing. This is to prevent anyone from simply filing for bankruptcy and getting all their massive debts written off without paying for them. Thus with the enforcement of the BAPCPA in 2005, credit card issuers now have more clout in your bankruptcy. For one thing, credit card issuers can now block your bankruptcy filing.
It is to the best interests of credit card issuers to file a dispute to prevent you from filing bankruptcy so that you are compelled to pay up all your credit card debts. With this new right they have afforded them by the BAPCPA, credit card issuers will find just about any excuse they can think of to block your bankruptcy. So here’s what you can do to stop their actions:
1. Use only one credit card
If you need to make your purchases of necessities like food or gas, try to make them all using only one card. If that is not possible because of credit card limits, try to use as few cards as you can because one of the reasons the bankruptcy court can use to throw out your bankruptcy filing is multiple card usage to jack up your debts. Also make sure you keep your credit card statements and purchase receipts so that you can prove the necessity of your purchases.
2. Get a refund for luxury items purchases
According to the law, you will be scrutinized for your credit card spending for up to 90 days prior to your bankruptcy filing. So if you have made purchases of non-essential luxury items within that time, you may want to consider returning the items to reverse your credit card purchases and reduce your debts.
3. Keep credit card debt to a reasonable limit
Generally the limit at which the credit card issuers dispute your bankruptcy filing is $10,000 of debt. So try as far as possible to keep your credit card debt to under $10,000. Of course, the amount of credit card debt you hold should be as low as possible. And while this is not an absolute figure, it is a good gauge of how much debt is too much in the eyes of credit card issuers. However, take note that credit card issuers can technically file a dispute to your bankruptcy no matter how little or much you owe them.
So take note of these factors when filing for bankruptcy. If you wish to file for bankruptcy, contact us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Jan 24th, 2012. Comment. 
If you wish to consider filing for Chapter 7 or Chapter 13 bankruptcy, you need to know how it affects your credit score. Nearly 50% of consumers do not understand the purpose of their credit score according to a survey by Consumer Federation of America and Fair Isaac Corporation. A consumer’s credit scores is used by financial institutions to decide whether to extend or deny credit to that consumer. In addition, it can also affect the interest rates and amount of loan you receive. So a poor credit score can make borrowing more costly.
The most commonly used formula to determine a person’s credit score is the FICO score, developed by Fair Isaac using 22 pieces of data from 3 major reporting agencies namely TransUnion, Equifax and Experian. Scores range from a low of 300 to a high of 850, with the average score being 723 according to Bankrate.com. In addition there are five other data points that make up the bulk of the FICO score:1. Payment history (35% of the rating)2. Length of credit history (15%)3. New credit (10%)4. Types of credit used (10%)5. Debt (30%)
If you have filed for bankruptcy, your credit score can fall. A foreclosure can result in an 85-160 point drop and bankruptcy taking a score down 130-240 points.
Accounts discharged in a bankruptcy will remain on your credit report for a maximum of seven years. The bankruptcy itself, however, can remain on the credit report longer depending on which chapter you file. If filing under Chapter 13, the bankruptcy can remain noted on your credit report for 7 years. If filing a Chapter 7, 11 or 12, the designation can remain for up to 10 years.
But you can improve your long term credit score by taking several steps:1. Pay bills on time. This is the most weighted factor in FICO scores. If you are always late, your score can drop as much as 100 points.2. Keep credit balances low. FICO scores calculate your score based partly on your available credit to your outstanding balances.3. Close your credit accounts. Creditors like to see consumers with established and lengthy credit histories.4. Use discretion when applying for credit. When you apply for credit, lenders request a copy of your report. This request is noted on your credit report and can reduce your score.
Perhaps the most important thing to do when rebuilding your score is to be patient. It can take some time to rebuild credit, but by living within a budget and paying your bills on time your score will gradually improve.
Bankruptcy is a complex process, but can give people the fresh start they need. If you are considering bankruptcy or concerned about how it will affect your credit and your future, call us at (813) 200-4133.
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Filed under Chapter 7 (Tampa) by on May 26th, 2011. Comment.
Is it possible to rebuild a good credit standing after bankruptcy? The answer is an emphatic yes! Filing for bankruptcy does not mean you will never be granted credit or given a loan again. It all boils down to doing the right things to rebuild your credit after a bankruptcy.
Rebuilding your credit means having to re-establish your standing before the credit bureaus. To do so, you have to show yourself to be prompt and faithful in paying your dues. There is practically no way for an individual by himself to deal with credit bureaus and because of that, you need to go through an intermediary like a credit card company. Credit card companies submit regular reports on their clients to the credit bureaus.
So the first step would be to apply for a credit card. Since you have been a discharged bankrupt, some banks might impose certain restrictions and conditions in issuing you a credit card. For example, you may be granted a secured credit card i.e. one that is backed up by some collateral put up by you. Another example may be a bank issuing you a prepaid credit card which is a credit card where you are given credit only upon paying the bank. Some banks might even issue you a credit card that is only valid in certain countries and not worldwide.
Once you have been issued with your credit card, you should seek out a regular payment schedule where you can pay using your credit card. Then all you need to do would be to use your credit card to pay the regular payments each month. As long as you regularly pay each month’s payments on time with your credit card, your credit score will eventually rise as the credit company reports your payments to the credit bureaus.
Another means of increasing your credit score is to obtain a mortgage. This may be difficult due to your bankruptcy but there are some mortgage products you may qualify for. It may be one with a higher interest rate or you may need to take up an interest-only loan in order to get a mortgage. You cannot afford to be picky. Just choose a mortgage arrangement that is within your means to repay and start repaying on schedule. This will also improve your credit rating over time.
If possible, try to get a good mix of credit arrangements without biting off more than you can chew. For example, if you can secure a store account, a car loan and housing loan, it goes to show to the credit bureaus that you can manage different types of credit well. Such a credit mix will augur well for you in increasing your credit score.
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Filed under Chapter 7 (Tampa) by on Jul 15th, 2010. Comment.
Is it possible to rebuild a good credit standing after bankruptcy? The answer is an emphatic yes! Filing for bankruptcy does not mean you will never be granted credit or given a loan again. It all boils down to doing the right things to rebuild your credit after a bankruptcy.
Rebuilding your credit means having to re-establish your standing before the credit bureaus. To do so, you have to show yourself to be prompt and faithful in paying your dues. There is practically no way for an individual by himself to deal with credit bureaus and because of that, you need to go through an intermediary like a credit card company. Credit card companies submit regular reports on their clients to the credit bureaus.
So the first step would be to apply for a credit card. Since you have been a discharged bankrupt, some banks might impose certain restrictions and conditions in issuing you a credit card. For example, you may be granted a secured credit card i.e. one that is backed up by some collateral put up by you. Another example may be a bank issuing you a prepaid credit card which is a credit card where you are given credit only upon paying the bank. Some banks might even issue you a credit card that is only valid in certain countries and not worldwide.
Once you have been issued with your credit card, you should seek out a regular payment schedule where you can pay using your credit card. Then all you need to do would be to use your credit card to pay the regular payments each month. As long as you regularly pay each month’s payments on time with your credit card, your credit score will eventually rise as the credit company reports your payments to the credit bureaus.
Another means of increasing your credit score is to obtain a mortgage. This may be difficult due to your bankruptcy but there are some mortgage products you may qualify for. It may be one with a higher interest rate or you may need to take up an interest-only loan in order to get a mortgage. You cannot afford to be picky. Just choose a mortgage arrangement that is within your means to repay and start repaying on schedule. This will also improve your credit rating over time.
If possible, try to get a good mix of credit arrangements without biting off more than you can chew. For example, if you can secure a store account, a car loan and housing loan, it goes to show to the credit bureaus that you can manage different types of credit well. Such a credit mix will augur well for you in increasing your credit score.
Filed under Chapter 7 (Tampa) by on Jul 1st, 2010. 1 Comment.
Is it possible to rebuild a good credit standing after bankruptcy? The answer is an emphatic yes! Filing for bankruptcy does not mean you will never be granted credit or given a loan again. It all boils down to doing the right things to rebuild your credit after a bankruptcy.
Rebuilding your credit means having to re-establish your standing before the credit bureaus. To do so, you have to show yourself to be prompt and faithful in paying your dues. There is practically no way for an individual by himself to deal with credit bureaus and because of that, you need to go through an intermediary like a credit card company. Credit card companies submit regular reports on their clients to the credit bureaus.
So the first step would be to apply for a credit card. Since you have been a discharged bankrupt, some banks might impose certain restrictions and conditions in issuing you a credit card. For example, you may be granted a secured credit card i.e. one that is backed up by some collateral put up by you. Another example may be a bank issuing you a prepaid credit card which is a credit card where you are given credit only upon paying the bank. Some banks might even issue you a credit card that is only valid in certain countries and not worldwide.
Once you have been issued with your credit card, you should seek out a regular payment schedule where you can pay using your credit card. Then all you need to do would be to use your credit card to pay the regular payments each month. As long as you regularly pay each month’s payments on time with your credit card, your credit score will eventually rise as the credit company reports your payments to the credit bureaus.
Another means of increasing your credit score is to obtain a mortgage. This may be difficult due to your bankruptcy but there are some mortgage products you may qualify for. It may be one with a higher interest rate or you may need to take up an interest-only loan in order to get a mortgage. You cannot afford to be picky. Just choose a mortgage arrangement that is within your means to repay and start repaying on schedule. This will also improve your credit rating over time.
If possible, try to get a good mix of credit arrangements without biting off more than you can chew. For example, if you can secure a store account, a car loan and housing loan, it goes to show to the credit bureaus that you can manage different types of credit well. Such a credit mix will augur well for you in increasing your credit score.
Filed under Chapter 7 (Tampa) by on Jun 3rd, 2010. Comment.
