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There
is Life After Bankruptcy!
Your
ability to re-establish credit after filing
bankruptcy is better than ever.
After you get your bankruptcy discharge, you will receive
many solicitations from lenders offering to
finance homes, vehicles and credit cards.
And....why not?
Bankruptcy gets rid of debt
and getting rid of debt is the first step for
re-building credit. Getting rid of some debt
puts you in a better position to handle more
credit.
In
fact...many, many former clients have told
us they started getting credit card offers
right away...within weeks after their
bankruptcy case was done.
Here
are some tips on how to rebuild your credit.
- Open
a checking or savings account.
And, start saving some money. You will
need money for down payments. The more
money you can pay down on a purchase, the
lower the interest rate you will get.
Besides....Lenders may look how you handle
a checking and savings account as one
indication of whether or not you can
responsibly handle money.
- Apply
for store and gas credit cards that you
would normally pay cash.
- Apply
for a secured card where you deposit cash
and charge against it. Make sure
you only apply for secured cards with a
company that promises to report regularly
to the major credit reporting agencies.
The major credit reporting agencies are
Equifax (www.equifax.com) , Experian
(www.experian.com) and TransUnion
(www.transunion.com). They
maintain your credit record. Think about
it. What good does it do to get a secured
card from a company that does not report
to the major credit bureaus? Pay back
advances in a timely fashion to build a
track record of paying on time...so that
they will be reflected as positive marks
on your credit report.
- Pay
your utility bills and rent on time
.
After filing
bankruptcy...building up a history of paying
on time is crucial.
- Find a friend or relative to
cosign for you on a loan and pay it on
time. But...be careful here. If
you don't pay it or don't pay it on
time....you will do significant damage to
the credit record of the friend or
relative who was kind enough to cosign for
you.
- Look for car dealers and mortgage
brokers that claim to be "bankruptcy
friendly". Buy a used car so
you do not get hit with the depreciation
that occurs during the first two years of
a new car purchase.
- Stay away from payday loans and
finance companies that are at high
interest rates and are a "bad
credit" trap. These outfits
will suck you dry and leave you back in
debt.
- Write a letter to each credit
reporting agency explaining the
circumstances that lead to you filing.
You are allowed to submit up to 100 words
of explanation to each credit reporting
agency.
- Live within your means. If
you don't have the money....don't spend
it. If it helps....Limit yourself to what
you need...rather than....like in the old
days that lead you deep into debt....when
you bought everything you wanted...whether
you needed it or not. And....as a rough
guideline....try to make sure your
payments on consumer debts don't exceed
20% of your expendable income.... after
your costs for housing and a vehicle.
- Pay your remaining debts....left
over from your bankruptcy....on time.
This is worth repeating. This includes
things like non-dischargeable taxes,
student loans, car loans, truck loans, and
house mortgages. This is crucial...if you
want to reestablish your credit.
Make sure the information on your credit
report is accurate. The best way
to do this is to get an updated copy of your
credit report. After filing
bankruptcy, it's probably a good idea to get
an updated credit report every 6 months for
a year or so. How do I get a copy of
my credit report? The easiest way is
to get it directly from one of the 3 major
credit reporting agencies. Each of
them offers a "3-in-1" credit report, which
simply means a credit report containing all
the information from all these of their
agencies. The cost for the "3-in-1"
credit report is $29.95 (As of 12/19/04).
The best way to order your credit report is
"online". You can go to any of these
websites: Equifax (www.equifax.com)
, Experian (www.experian.com)
and TransUnion (www.transunion.com).
There is also other valuable information on
these websites, including: (1) information
to help you understand your credit score,
(2) further information on how to rebuild
your credit, and (3) information on how to
fix any errors that may appear on your
credit report.
NEWS
ALERT:
After of 9/1/05, North Carolina residents
have a right to get one(1) FREE Credit
Report per year. "Click here"
to find out more.
Want
even more information? One of the best
resources....maybe the best..... about life
and credit after bankruptcy is the book
entitled "Bounce Back From
Bankruptcy", written by Paula Langguth
Ryan. Buy a copy and read it. One way to find
out where you can buy a copy of this book is
to search on line, typing into the search
engine "Search" box, the name of the book. Here is a list
of the topics covered in the book:
- How
to build new credit
- How
to avoid getting in debt trouble
again
- How
to get a car
- How
to line up an apartment or house to
rent
- Why
my employer can't fire me for filing
bankruptcy
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- How
to get rid of my remaining debts
- How
to get a new credit card
- How
to travel without credit
- How
to buy a home after bankruptcy
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