Bankruptcy Resource Group

January 31, 2009

How long does a bankruptcy affect credit?

Filed under: Uncategorized — C.Welch @ 5:17 am

magnifying glass & papersTraditions can be hard to break. One of those traditions is that debt should be forgiven every seven years, a concept that stretches back thousands of years to the time of the old testament. Deuteronomy 15:1 states, “At the end of every seven years you shall grant a release of debts.”

Skip ahead a couple of thousand years or so and our judicial system still honors the seven-year cycle of debt forgiveness. Bad debts and delinquencies are forgiven after seven years. A bankruptcy, however, usually appears on credit ratings and reports for ten years.

Unlike criminal records, filing for bankruptcy cannot be expunged, or removed, from your record because it is not a ciminal act, as California bankruptcy attorney Shawn Doan explains here. Mr. Doan blames the credit agencies for propagating the idea that bankruptcy is a crime. He writes, “The credit industry, more specifically the debt buying and collection industries, seem to me to be responsible for the falsely conceptualization of the notion that filing for bankruptcy relief is somehow criminal behavior or creates an inference of criminal behavior.”

If you’re exiting a bankruptcy, keep your chin up. You can rebuild your credit, and Bankruptcy Resource Group can help by connecting you to a local lender that works with those who have emerged from bankruptcy court.

Top photo by Jan Kromer.

January 30, 2009

Obama-backed legislation could help bankruptcy filers

Filed under: Uncategorized — C.Welch @ 7:14 am

Health emergencies. Job loss. A natural disaster. These are the personal crises that lead many people to file for bankruptcy. The heaviest burden for most people who file for bankruptcy is their mortgage.

The current economic crisis has many home owners wringing their hands over making their mortgage payments. Fortunately, the Obama administration has proposed a measure that could help homeowners avoid bankruptcy.

This new legislation would grant bankruptcy judges the power to change the terms of mortgages. As the Pocono Record put it, “New bills have been introduced in the House and Senate to allow judges to alter the terms of distressed mortgages in bankruptcy cases. Similar legislation failed to win approval last year, but growing numbers of elected officials — including new President Barack Obama — have voiced support recently. ”

Opponents of the bill, including some banks that are also happen to be receiving government bail-out money, claim that it would result in homeowners jumping to file for bankruptcy so as to improve their mortgage terms.

But I doubt that judges would grant improved terms to homeowners just looking to save a few thousand bucks over the long haul. Plus, most homeowners are wary to file for bankruptcy because they know it leaves a mark on your credit record that’s not easy to erase. It’s likely that only people who truly fear losing their homes will turn to the bankruptcy court for improved terms.

If you’re looking to improve your credit after a bankruptcy, Bankruptcy Resource Group can help. They’ll match you up with a nearby affiliate car dealer that specializes in arranging post-bankruptcy loans. Making consistent, early car payments is a great way to improve your credit.

January 29, 2009

How to Rebuild Credit: Practicing Good Credit Habits

Filed under: Budgeting, Online resources, Rebuilding Credit, Uncategorized — Tags: , , , , — C.Welch @ 7:54 am

422358899_9015e472e6_mHere at Bankruptcy Survivor, we spend a lot of time thinking about how people can get back on their feet after bankruptcy. In bankruptcy court, agreements are reached for all of your debts, so you exit bankruptcy with a nearly clean financial slate. I say nearly clean because you will still have your bankruptcy on your credit reports. One of the most effective ways to erase the lasting signs of bankruptcy is to attain new credit and use it wisely.

So here are some habits to keep in mind as you retrain yourself to use credit following a bankruptcy.

  1. Start slowly. When you get your new credit card, resist running out and buying whatever toy you don’t have the cash for. Instead, make small, deliberate purchases and pay them off early each month. Try just making one small, automatically withdrawn payment each month, and paying your full credit card bill soon after. If you can stick to this for six months, the credit agencies will get the message that you’re willing to practice self-discipline– and they might raise your credit score.
  2. Grow Slowly. As you become comfortable with budgeting and paying your bill early, you may choose to carefully add more monthly purchases. Some suggest limiting yourself to only 30% of your credit limit, but I think a better limit is to buy only what you’re absolutely sure you’ll be able to pay for when your credit card bill rolls around. As they say on SNL, Don’t Buy Stuff You Cannot Afford.
  3. Track Carefully. Check your credit card statements against your tracked expenses each month. Your lender may offer online tracking of your credit card expenses– sign up, and be sure to check your accounts regularly. Keep your credit card balance in mind, and make a commitment to paying it in full each month.
  4. Be Stingy. Just like some people get a kick out of spending money, others get a buzz from saving it. Put yourself firmly in the last group. On those RARE occasions when you can’t pay your fill bill in full, don’t charge willy-nilly. Avoid adding purchases to your credit card, and be sure to pay the minimum balance at the very least. When extra spending money floats your way, keep a third for debt reduction, a third for savings, and a third for real spending money. Self-imposed restrictions can lead to a beautiful sense of self-control.
  5. Be Picky. Don’t add extra credit cards. Plan to shred or recycle most of the credit offers that will start coming your way. After a year or two, you’ll be a very choosy credit dance partner indeed–and you should be after earning your way back to a higher credit score.

If you’re looking for a credit card or bankruptcy after a bankruptcy, Bankruptcy Resource Group can help. BRG maintains a well-connected network of affiliate lenders and car dealerships that work closely with post-bankruptcy borrowers.

Top photo by The Consumerist.

January 28, 2009

How to Rebuild Credit: Three ways to track monthly expenses (and pay your bills early!)

Filed under: Budgeting, Financial News, Mortgages, Online resources, Rebuilding Credit — Tags: , , , , , — C.Welch @ 6:16 am

finanzas2After a bankruptcy, your credit is like a delicate new chirping spring chick that’s just stumbled from the nest. It doesn’t even have feathers yet (perhaps like your nest egg). If you’re careful about your credit, your little chick will grow back into a healthy eagle (or swan, depending on your financial Patronus). Eventually, your extra income could be padding a healthy nest egg.

One way to organically rebuild your credit following a bankruptcy is to pay your bills on time early. This may sound trivial, but there’s no quicker way to lose the confidence of the credit rating agencies than to miss a credit card payment. If you dedicate yourself to the idea that you’ll be prepared to pay every bill early, the worst case scenario will be that you’ll pay the bill on time. Imagine the financial peace of mind that comes with consistent, early payments. Over time, that sort of behavior will earn you a higher credit rating.

And so, I present several methods for tracking when your monthly bills are due. Please add your own ideas as well— the more methods, the merrier! Here are my Three Ways to Track Monthly Expenses:

1. Make an ordered list. The Spanish language version above gets the basic point across. If you haven’t already listed your monthly expenses, track all of your regular bills for a month. Create a chart showing which bills are due when and for how much. If might look something like this:

Due Date Bill Name Amount
March 5th AT&T Wireless $50
March 12th Phone $30

2. Track expenses on your cell phone. Some cell phones include calendar operations that are advanced enough to track expenses and monthly recurring events, like when bills come due. If you have a phone with Windows Mobile Smartphone 2003 or better, you can download Smart Bill Log 1.0, a program specifically made to track and tick off bills as you pay them.

3. Track expenses on your email calendar. Yes, sometimes I wonder if Google is getting to be a little too powerful and all-knowing. Still, their email applications are undeniably useful. Their Google Calendar allows you to fully populate a self-replicating calendar. What I mean is, you can set recurring occurances, including bills. Just mark when the bills come in, set the reminder to repeat monthly, and you’re set. (Google is not the only email service to offer a calendar application– they’re just the most familiar to me.)

Once you’re comfortable juggling your bills, Bankruptcy Resource Group can improve your credit score even more by hooking you up with a credit-improving new auto loan.  Visit Bankrg.com to learn more.

Top photo by Miguel de Luis.

January 27, 2009

How to Rebuild Credit after a Bankruptcy: Make a Budget

Filed under: Budgeting, Rebuilding Credit — Tags: , , , — C.Welch @ 1:27 am

3067914489_a43026cff0_mNow that your bankruptcy is behind you, it’s time to start rebuilding your credit. Don’t worry—it’s not impossible to come back after a bankruptcy. Otherwise, how could one explain multiple bankruptcies? Of course, you probably want to avoid another bankruptcy like the plague. One of the hardest parts of rebuilding credit is that it typically requires a change in personal spending habits. The first step in changing your spending habits and improving your credit reports is setting and following a budget.

That much you’ve probably known since high school. As is often the case, it’s easy to promise yourself you’ll control your spending, but unless you know how to budget your expenses, you might end up right back in bankruptcy court.

To make your journey back to solvency a little smoother, here’s a primer in making a budget.

  1. Find a big, clean sheet of paper. A white board works even better, as you can easily change it when your financial situation changes.
  2. Draw a line lengthwise down the middle of your page/white board. You should now see two columns on your page.
  3. Title one column “Expenditures.” Title the other “Income.”
  4. In the expenditures column, list your monthly expenses. This can be the hardest part of budgeting, as many people simply aren’t aware of how they spend their money. Look for an upcoming post on techniques for tracking spending. For now, think about your major expenses such as phone, internet, rent, electricity, and heat. Gather your monthly bills to make sure you’ve included as much as possible. Add all items in this column. The result is a basic picture of your monthly spending.
  5. In the income column, list all of your earning sources, including salary, wages, and self-employment income. Do you mow the neighbor’s lawn for $20 every week? Be sure to include that. Do you get a bonus for every sale? Jot down a conservative estimate of your monthly commissions earnings . Alimony, dividends and interest, pension or retirement income, and public assistance like unemployment benefits also go in this column. Rack your brain to make sure you include all of your incoming pay. Remember to list your income after taxes have been paid. Total this column, and you have a basic understanding of how much money you’re bringing in every month.

Whew! After all that hard work, you have a basic picture of your financial landscape. As you practice creating and maintaining your budget, new expenses and income will come to mind, but for now, if your expenditures total is higher than your income total, ask yourself where you can make cuts. Do you really need that Starbucks java every morning? Can you take showers at the gym? Get creative, stick to your new budget, and you’ll find yourself well on your way to enjoying financial peace of mind.

Top photo by Jekert Guapo.

January 24, 2009

Mortgage troubles? Free resources for homeowners.

Filed under: Financial News, Mortgages, Rebuilding Credit — Tags: , , , — C.Welch @ 4:58 am

2960675738_50952cbb1cAs the country creeps through the recession, it’s been interesting to see how consumers are faring in each state. On the more positive side, North Dakota has a growing economy, low unemployment, and a sizable budget surplus. On the other end of the scale, Michigan is now the only state to post double-digit unemployment since the early 1980s.

Ultimately, the national economic picture won’t brighten until consumers across the country feel more confident that their jobs are secure, their bills will be paid, and they can afford to loosen their death-grip on their wallets.

In the face of unexpected expenses, like medical emergencies, many consumers worry that they will miss a mortgage payment. In these circumstances, it’s easy to ask yourself whether you should file for bankruptcy.

Fortunately, there are resources to help consumers make their mortgage payments. As Jim Gallagher writes in Bankruptcy: A how-to on going broke, “Bankruptcy isn’t the only option. If you’re worried about paying the mortgage, you can get some free advice and help negotiating with your lender by calling Beyond Housing at 314-533-0600 and the Homeownership Preservation Foundation, www.995hope.org or call 1-888-995-4673 for more information.”

Homeowners may get an additional break thanks to a new Country Wide settlement. Country Wide will provide loan modifications to almost 397,000 mortgage-holders across the country.

If you’ve already been through a bankruptcy, and you’re looking for a way to build credit, consider partnering with Bankruptcy Resource Group. BRG has partnered with auto dealers from across the country to create a network of lenders that work closely with consumers after a bankruptcy. We can connect you with a nearby dealership that specializes in post-bankruptcy loans.

There’s never been a better time to work on rebuilding your credit. After all, things can only go up from here, right?

Top photo by woodleywonderworks.

January 22, 2009

3 reasons NOT to reaffirm your car loan following a bankruptcy

Filed under: Uncategorized — C.Welch @ 3:52 pm

512450358_bc934110e0_mAs you exit your bankruptcy, you may be encouraged to reaffirm your auto loan. Initially, this probably seems like a good idea. After all, you get to keep the car as long as you continue to make payments, almost as if you had never been through bankruptcy.

Keep in mind, however, that reaffirmations are completely voluntary, and for good reason. In most cases, reaffirmation agreements include a “cooling off” period so that you can change your mind within a certain time frame. And there are plenty of reasons to change your mind. Here are the top three reasons why reaffirmation ISN’T a good idea:

1) The agreement may be difficult to pay month after month. It could prove difficult to make payments at pre-bankruptcy rates. If you are planning to reaffirm your loan, don’t be afraid to ask for advice from your attorney or judge. They’ve seen enough cases to know whether this agreement is a financially sustainable option.

2) Some lenders will let you keep the car without a reaffirmation agreement. If you’re attached to your car, and can’t imagine getting through the day without it, remember that most lenders would rather let you keep the car, as long as you continue to make payments, especially in today’s economic climate.

3) Reaffirmation agreement payments DON’T rebuild your credit. Remember that once you entered into bankruptcy, payments on previous holdings are not reported to the credit agencies. This means you are NOT rebuilding your credit, which is crucial following a bankruptcy.

You should be rewarded for making payments, and you can by avoiding reaffirmation and taking out a NEW auto loan to help rebuild your credit. Bankruptcy Resource Group can help you find a nearby auto dealership affiliate that specializes in auto loans following bankruptcy. Call 888-867-2969 today to learn more.

Top photo by Michael Vroegop.

January 20, 2009

Debt is scary– just ask E.A. Poe.

Filed under: Rebuilding Credit — Tags: , , , , , , , — C.Welch @ 12:39 am

2787381665_b19e49216c_mWith Obama’s inauguration looming on tomorrow’s horizon, it’s no surprise that MLK, Jr. has gotten more press than another groundbreaking American, Edgar Allen Poe. Today marks the 200th anniversary of Poe’s birth. On that day in January 1809, few would have guessed that the son of actors would grow up to change the face of American literature. Poe is credited with writing the first modern detective story, along with chilling, mind-bending tales such as “The Telltale Heart,” “The Bit and the Pendulum,” and “The Black Cat.” He was also one of the first notable Americans to try to make his living entirely from writing.

And he might have earned enough to balance his budgets, except for a few stumbling blocks. His love of gambling got him in trouble in college. Any other child of the time probably would have crawled to mum and pop to scrounge for money. Allen wasn’t so lucky– his mother died when he was two years old, and his foster parents refused to cover his debt. He was plagued with money problems for the rest of his life, despite bringing in paychecks from multiple editing and writing gigs.

Some things never change. Two centuries later, people often fall into debt the same way. Sometimes our own weaknesses (like Poe’s gambling) exacerbate situations beyond our control (like how Poe’s mother’s death left him in the hands of stingy foster parents). When our expenses overwhelm us, and there’s no other path back to financial health, we turn to the bankruptcy courts for a second chance.

If you’re looking for a way to rebuild your credit following a bankruptcy, call Bankruptcy Resource Group, which sponsors this blog. Bankruptcy Resource Group can hook you up with a nearby auto dealer specializing in working with people following bankruptcies. This can help re-establish your credit. Poe never had the chance to start over with a clean slate, but if you’re going through a bankruptcy, you do. Contact Bankruptcy Resource Group today and ask how we can help you rebuild credit following a bankruptcy.

Top photo by Kevin Dooley.

January 19, 2009

Online Bankrupcty Resources

Filed under: Online resources — C.Welch @ 1:57 am

2905410970_35fd115e3b_m1Here at Bankruptcy Survivor, we’d like to think that you’ve already subscribed to our RSS feed or bookmarked us under “bankruptcy resources.” As we build our archives of articles on bankruptcy news and tips, we hope to become an invaluable source on all things related to bankruptcy and rebuilding credit. Still, we’re not about to tell you to limit yourself to only our site. When you’re going through something as complex as bankruptcy, it’s best to have a wide array of resources at your fingertips.

So, here are a few of the informational websites (aside from Bankruptcy Survivor, of course) we’ve found on bankruptcy.

Bankruptcy-Laws.org Their press release is dated 1/5/09, so this site is just getting started. Still, it has great basic information and has the potential to build into one of the web’s bankruptcy information powerhouses.

BankruptcyInformation.com Be sure to check out their FAQ section.

TheBankruptcySite.org Scroll down on the main site to see information for each state.

BankruptcyLawNetwork.com If you’re in the middle of filing for bankruptcy, this site is an invaluable resource. And you can be sure it has the best information, since it’s written by lawyers.

What useful websites have you found to help you through your bankruptcy? Comment and share the information love!

Top photo by Lu.

January 15, 2009

Can bankruptcy help you? Three questions to help you decide.

Filed under: Attorneys, Budgeting — Tags: , , , , , , — C.Welch @ 7:56 pm

2805760593_a80f1978c1_mFiling for bankruptcy is about as much fun as going to the dentist, but just like root canals, sometimes it’s unavoidable. Bankruptcy isn’t pleasant, but it’s often the best—or only—choice you have. Should you file for bankruptcy? Here are a few questions to help you decide.

1. What do my friends and family members say? Filing for bankruptcy shouldn’t be taken lightly or done without extensive reflection. Your life will change after a bankruptcy. Lenders, credit companies, and mortgage officers will treat you differently once they see you’ve been through bankruptcy, even if it was the smartest choice you ever made. So be sure to talk about it with your most trusted confidants. This initial conversation might be awkward, but you’ll appreciate their support during and after your bankruptcy proceedings.

2. Have I reviewed my budget? Studiously track your spending for a week to see where you can cut down on expenses. Review your liquid assets, debts, and major expenses. Can you create a sustainable budget? If so, follow it for a month and reassess. If you’re still scrambling to pay major bills, meet with a professional, like a bankruptcy attorney.

Here are a few additional sub-questions to help you determine if you should meet with a professional:

  • Are you making only the minimum payment on your credit cards each month?
  • Are you using your credit cards to pay for necessities, such as food and medicine, because you don’t have the cash?
  • Are you using your credit cards to get cash advances for normal expenses?
  • Are you making your monthly payment after the due date?
  • Are your credit card balances more than your liquid assets?

If you answer yes to two or more questions, it’s time to get help.

3. What does my bankruptcy attorney say? Bankruptcy lawyers often say their clients come to them when it’s too late. Don’t delay in meeting with a professional, who will be able to help review your accounts and determine if bankruptcy is the best option. Rest assured that these professionals won’t judge you– after all, they’ve probably seen far worse. And don’t worry about initial fees—many bankruptcy firms offer free consultations. (See the links to the side for lawyers in your state.)

If after all of this you’ve made the decision to file for bankruptcy, be aware that you’ll need to rebuild your credit afterwards. Bankruptcy Resource Group can help by connecting you with a nearby auto dealership that specializes in providing auto loans to people who have filed for bankruptcy.

Via Bankruptcy Law Network.

Top photo via Flickr creative commons.

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