Rebuilding Credit: Post Bankruptcy

What to do Moving Forward

Many people hesitate over declaring bankruptcy due to concerns that it will wreck their credit score and make it impossible to get a loan for a car, house or other items in the future. The result is that these individuals continue to live with the stress and hardship that go along with being deep in debt, often unnecessarily. In truth, bankruptcy will have a significant impact on your credit, but if you are in the position where you are seriously considering bankruptcy, your credit is probably already suffering from a high debt to income ratio and missed payments.When you do file for bankruptcy, it will remain on your credit report for ten years, but at that point it will be removed.

Not only can you look forward to that date, but you can also take effective steps now to rebuild your credit. Beyond removing false information about your credit history, you can also rebuild your credit much sooner than you may think. Many credit card companies will offer a secured credit card, which requires the card holder to deposit a specified sum in the account each month against which transactions can be drawn. There are also many lenders who will extend loans to individuals who have recently declared bankruptcy. You will likely be required to pay a higher interest rate, but you will have an opportunity to establish a new credit history by making on-time payments.

Addressing Your Questions & Concerns

If you are contemplating a bankruptcy petition, you probably have a lot of questions about your financial future. How much does bankruptcy cost? How will my credit be affected? Will all of my debts be discharged? These are pertinent questions. At The Price Law Group, we are whole-heartedly dedicated to getting clients the answers to their financial and legal questions.

After you file a bankruptcy petition, you might feel like your financial reputation is completely wrecked. Yes, bankruptcy will have an adverse effect on your credit score, but don't give up! Bankruptcy is designed to give people a fresh start, not ruin their financial futures. That's why it is important to take steps towards repairing your credit – even immediately after you file for bankruptcy.

Understanding Your Rights

According to the Federal Trade Commission (FTC), you are allowed one free credit report every year. Under special circumstances, you may be allowed extra reports. If a company takes "adverse action" against you, such as denying your credit application, denying you insurance application or denying you employment, you are entitled to credit report. You may be allowed an extra credit report if you are unemployed and plan on searching for a job in the near future, are on welfare, or you believe that your report is inaccurate because someone stole your identity.

There are three nationwide credit report companies: Equifax, Experian, and TransUnion. Each of these companies will provide you with a free, annual credit report if you ask for it. You may order one request form each company at the same time or stagger them throughout the year to gain a broader view of your reports annual progression. These companies operate from a central website. Avoid contacting them individually. Companies are allowed to charge you up to $10.50 to purchase additional reports. Avoid this fee by only requesting information through the central website.

Avoiding Scams

You've probably seen advertisements like this before: "We can eliminate your bad credit! Call today!" or, "Let us remove bankruptcy from your credit file!" These are probably scams. According to the FTC, it is illegal to remove accurate, negative information from your credit report. During this time that your bankruptcy is reflected on your credit report, you may take steps to improve your credit, but your score will still be affected negatively by your petition. A company m may be trying to scam you if:

• They want you to pay for a credit repair before delivering the service
• The company does not explain your rights as a consumer
• The company fails to inform you of credit repair steps you can take on your own
• They suggests that you create a new credit identity
• The company tries to persuade you to dispute any and all information on your credit report, even if it is accurate
• They tell you that you can eliminate accurate, negative information from your credit report

Many times, fraudulent companies will try to persuade you to commit crimes. For instance, erasing accurate, negative information from your credit report is illegal. If you follow false advice given to you by scammers, you may find yourself in legal trouble. Never lie on a loan application or credit card application. Never falsify your social security number or employer identification number from the IRS.

The only real way to improve your credit score is to continue making wise financial decisions and wait until negative information is eliminated form your record leally. If you take advice from suspicious companies and do these things, you may be charged with a serious crime. If you have questions about credit repair or bankruptcy, talk to an attorney from The Price Law Group today. We are ready to help you make the right decisions for your financial future!