Apr
30
Credit Repair After Bankruptcy: Your Options
April 30, 2009 | Leave a Comment
When it comes to credit repair after bankruptcy you have essentially three options:
1) Hire a credit repair company
2) Buy credit repair software
3) Do it yourself (free!)
Before we go further, for the purpose of this article “credit repair” means the removal of any inaccurate or obsolete negative information from your credit report - not the removal of accurate non-obsolete negative information from your credit report.
Okay, now that we’ve defined “credit repair”, let’s look at each of the three credit repair options in more detail:
1) Hire a credit repair agency.
You can hire a credit repair company, which usually costs a few hundred dollars or more. The advantage here is it saves you some time.
The downside to hiring a credit repair company is that it can be expensive as mentioned above, costing a few hundred dollars or more.
If you do decide to hire a credit repair company, choose one very carefully. Stay away from credit repair companies promising to delete accurate non-obsolete negative items from your credit report.
Why? Because even if the credit repair company gets lucky and does manage to remove any accurate non-obsolete negative items from your credit report it may only be temporary - the credit reporting agencies update their files on a regular basis, so any accurate non-obsolete negative item that was removed from
your credit report can re-appear again in the future.
While we’re on the topic of “non-obsolete” versus “obsolete” negative information on your credit report, let’s look at how long negative information can remain on your credit report: Most negative items can remain on your credit report for up to seven years from the date they were included in your bankruptcy. A Chapter 7 bankruptcy can remain on your credit report for ten years from the date it was filed, while a Chapter 13 can remain on your report for seven years from the
date it was filed.
2) Buy credit repair software
There are a number of credit repair software programs on the market today. This option is typically less expensive than a credit repair company because you are doing the work. It also saves you time from having to compose your own letters.
Here’s how most credit repair software works: You load it onto your computer, fill in the blanks with your information, and then print out the customized dispute letters the software creates.
The risk you run here is that the credit reporting agency may not investigate the dispute and respond by saying they believe your dispute is “frivolous and irrelevant”. Why? Because when they see any sort of form letter they may think you are using a credit repair company.
3) Do it yourself
This is usually your best option, and it’s free. You just need to know exactly what to do when it comes to credit repair. You can start by visiting each major credit reporting agency’s website and reading their instructions on how to dispute any inaccurate or obsolete negative information on your credit report. The three major credit reporting agencies are: Experian, Equifax, and Trans Union.
In addition, you can also pick up a book on credit repair. One word of warning though: Some books and courses encourage you to do illegal things: For example, creating a “new” identity. Stay away from these! Others are excellent resources when it comes to showing you how to remove inaccurate or obsolete negative
items from your credit report.
If you have discharged or dismissed bankruptcy and want to repair your credit, there are some specific steps you need to take. I have seen very few credit repair books that even mention them. In After Bankruptcy Credit Solutions, I go
into detail on each one.
For example, if you are applying for a home loan after bankruptcy, any inaccurate or obsolete negative information on your credit report can cost you thousands or tens of thousands of dollars in extra interest - if it doesn’t prevent you from qualifying for a loan. There is a way that you can get these
negative items on your credit report removed or updated in as little as 48 hours!
So now you know what options you have when it comes to credit repair. Bottom line: Doing it yourself is usually the best, and most inexpensive, option when it comes to credit repair after bankruptcy. It just takes an investment of time on your part - but it can be well worth the effort.
Remember, if you have a discharged or dismissed bankruptcy on your credit report there are some specific steps you need to take when it comes to credit repair. Keep this in mind if you choose the “do it yourself” option and plan to shop for a book on credit repair.
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Copyright © 2006 Innovative Solutions Publishing, Inc. All rights reserved.
The company and product/service names referenced in this article are the trademarks, registered trademarks or service marks of their respective owners. None of the owners have sponsored or endorsed this article.
DISCLAIMER:
This information is designed to provide only a general overview of the subject matter herein.
This information is provided with the understanding that neither the publisher nor author is engaged in rendering legal, accounting or other professional advice. If legal or other expert assistance is required, the services of a professional should be sought.
Neither the publisher nor author shall be liable for any loss or damages, including but not limited to special, consequential, incidental or other damages, caused by the information contained herein.
================================================================
About the Author: R. Lawrence Anderson is author of
http://www.bankruptcy-credit-solutions.com
Popularity: 8%
Apr
28
Protecting Your Credit Report During Bankruptcy
April 28, 2009 | Leave a Comment
Bankruptcy should always be a last resort (see our Debt Relief section for bankruptcy alternatives). However, if you are determined to file bankruptcy but have not done so yet, then please take your time and don’t rush the process - it is more important to ensure that all your bases are covered rather than to make a mistake that may cost you later.
- Obtain Credit Reports. You absolutely need to obtain your credit reports from the three major credit-reporting agencies (Experian, Equifax, and TransUnion). Fortunately, you can conveniently obtain all three of your reports online in only minutes.
- Get Updated Information. You need the most up to date information you can have when filing for bankruptcy.
1. Call each creditor and ask them how much is owed and for the address where payment should be sent.
2. If they don’t handle the account, then ask them for the name and address of the collection agency that will take payment.
3. Call the collection agency and ask them how much is owed and for the address where payment should be sent.
4. When dealing with creditors and collection agencies don’t let them bully you or upset you over outstanding balances. Just collect the information you need.
All you have to say is, “Thanks. I will call your company back soon regarding this matter.” Don’t give them time for a rebuttal - just hang up.
If they push the matter, then only as a last resort tell them you will be filing bankruptcy. Give them the name and number of your attorney and end the call.
Credit Tip! 4. Learn the legal steps you must take to improve your credit report. The Federal Trade Commission’s “Building a Better Credit Report” has information on correcting errors in your report, tips on dealing with debt and avoiding scams–and more.Some companies will take this as a reason to step in and offer a settlement to reduce the amount owed in order to get you to pay. And sometimes people do call creditors and suggest bankruptcy just for this edge in negotiating a settlement, even when they don’t intend to file.
You absolutely don’t want to use this tactic if you are going to follow through with the bankruptcy. They will try to default your bankruptcy petition if they can.
- Identify All Accounts. It is important to identify all of your accounts.
1. If you don’t see a creditor or collection agency on the credit report you know for a fact you owe money to, then you need to find any billing statements or collection letters you may have received. These statements and letters will have necessary address information and phone numbers along with amounts still owed.
2. If you have no such information, then try to skip trace online to locate these companies. I personally like using this site for look up:
Credit Tip! You should contact the credit reporting agency and request that the inaccurate information be taken off. To do this you will need to send a letter of request and enclose a copy of the report with the incorrect information highlighted.http://www.bigbook.com/
You don’t have to know what city the company is located in, but definitely try to find the state.
3. If that is still not helping, then you can also try the Better Business Bureau site:
http://search.bbb.org/search.html
- Make a list of accounts for your bankruptcy attorney. Your attorney will need the addresses, balances, and account numbers to complete the bankruptcy papers.
- If there are creditors that you want to continue paying, then it is very important at this time to tell your attorney that you want to offer reaffirming on the debt. The attorney will then send the offer to the creditors you have selected who must accept it. Then the judge must accept the offer too.
- All other creditors depending on the bankruptcy:
1. Chapter 13. Once discharged then the balance will show as zero. The public record listing will remain 7 years from the file date. The accounts included in bankruptcy will remain on your credit report 7 years.
2. Chapter 7. Once discharged then the balance will show as zero. The public record listing will remain 10 years from the file date. The accounts included in bankruptcy will remain on your credit report 7 years.
Credit Tip! Every negative credit record on your credit report can be negated by you at any time. The credit bureau must reinvestigate and if that item cannot be verified within a reasonable amount of time, that credit record must be removed from the credit file (credit report).For further information on reporting periods please review the Fair Credit Reporting Act at the Federal Trade Commission web site, www.ftc.gov. Other recommended reading is the staff opinion letters regarding reporting periods.
- Usually prior to filing bankruptcy defaulted accounts go into collection or charge off status. The creditor stops reporting account information to the credit reporting agencies and turns the defaulted account over to a collection agency. The collection agency then picks up on the collection efforts and will from that point on report account information to the credit-reporting agency. The creditor is taken out of the loop.
Attorney Prepared Credit Report Repair. Legal And Easy Ways To Repair Your Credit Report, Save Money, Avoid Scams, And More.
Because account information is now handled by collection agencies instead of creditors, by the time your attorney sends your creditors notice of the account being included in bankruptcy, it is typically no longer “in their system” to properly notify the Credit Reporting Agencies to update zero balance and include in bankruptcy status.
Creditors have the means and responsibility to manually update account information with credit reporting agencies. But at this point no one is requiring creditors to change their policy and address this issue. If you have a complaint, you can do the following:
- File a complaint with the Federal Trade Commission. They regulate the Credit Reporting Agencies.
- File a complaint with your attorney generals office.
- File a complaint with the regulating company over each of the creditors.
- Your bankruptcy attorney can file complaints against creditors who do not report accurately.
Credit Tip! The credit report plays a significant role in the functioning of consumer credit markets. Since loans are advanced based on the credit reports the chances of loans going bad are minimal.When creditors don’t update account information with the credit reporting agencies, then you get an incorrect credit report that still shows you owe on the accounts in question, and that they are currently in collections or charge off status when in fact they are not.
The problem with this is that if you apply for new credit after your bankruptcy is discharged, then you are likely going to be declined because the new lender will assume that you still owe on the debt.
The clear, quick way to fix this problem is to:
1. Obtain a copy of your bankruptcy and discharge papers from your attorney or the courthouse. This may include a copy fee.
2. Make three copies of the section of papers that list all of the creditors and collection agencies that were included in the bankruptcy - usually this is called the Schedule F.
3. Forward these documents along with the discharge to all of the credit-reporting agencies (listed below) requesting that each creditor included in the bankruptcy be updated to properly reflect a zero balance with the status included in bankruptcy.
Credit Tip! Education loans are also sanctioned by colleges, universities, and other institutions based on your credit report. So, if your kids are planning to go to college and qualify in professional courses then their whole future will depend on your having a �healthy credit report.Experian
PO Box 2002
Allen, TX 95013Equifax
P.O. Box 740256
Atlanta, GA 30374TransUnion
P.O. Box 1000
Chester, PA 303744. Be sure when mailing correspondence to the credit reporting agencies to include a copy of your driver’s license and mail “certified return receipt requested”. This will ensure disputes are processed with little delay.
1. With the reports direct from each bureau you will have access to a file number and a phone number needed for accessing customer service.
2. You will see the addresses for each creditor on the credit report. If it is not there, then you can call customer service to ask them to provide you with the missing information.
3. When you call the bureau you can ask them to provide you with the phone numbers for each of the companies showing on the credit report.
The creditors will continue reporting the balance owed and show the status “reaffirmed” on your credit report.
Finally, if you have a creditor or collection agency which is not honoring your bankruptcy and continuing collection efforts, then be sure to contact your bankruptcy lawyer. Give your lawyer the name and address of the company bothering you so that he or she can send them official notice. Follow up with the lawyer if the creditor persists in harassing you. It is a violation and they can be held accountable if they don’t cease after notification of the bankruptcy.
As with all consumer issues, knowing your consumer rights throughout the bankruptcy process is essential. Taking a proactive approach at the onset of the process will help you on your “road to credit recovery”.
Pammila Phillis is a staff writer for CardRatings.com She is also a frequent contributor to the http://www.CardRatings.com message board and to the Star credit repair forum, a forum that she administers.
Popularity: 59%
Apr
27
Credit Repair after Bankruptcy
April 27, 2009 | Leave a Comment
Declaring bankruptcy will not repair or improve your credit score. According to legal experts, credit repair after bankruptcy is possible. Some companies will offer credit immediately after bankruptcy, at very high interest rates, but buying a home or a car may not be possible for several years. Unless a bankruptcy credit repair expert can help. There are a certain number of law firms that specialize in credit repair, for any reason, credit repair after bankruptcy is just one of many.
Bankruptcy is a last resort for those people who are swimming in debt and cannot pay their bills. Bankruptcy credit repair is an option for those people who have declared bankruptcy and would like to begin to reestablish themselves without paying exorbitant interest rates. Bankruptcy may allow them to keep their house and possibly one car payment. But, anything else of value goes.
Credit repair after bankruptcy may allow those who did not previously own a home, obtain a mortgage with a decent interest rate. A recent law requires that all persons who apply for bankruptcy relief have received credit counseling within the previous year. A Consumer Credit Counseling Services (CCCS) is a good place to start when a person is having trouble paying their bills. While credit counseling may prevent bankruptcy; credit repair counseling is not one of the services provided by the non-profit CCCS. The CCCS is allowed to charge a reasonable fee for their services, but the new bankruptcy law requires that if a person cannot afford credit counseling, it will be provided at no charge.
Credit repair after bankruptcy or after any event which damages one’s credit rating, is not free. It can be expensive, but if you have a past bankruptcy, credit repair may save you hundreds or even thousands of dollars in interest each year. The experts recommend that before you make any major purchase (whether or not you have a past bankruptcy) credit repair may be beneficial. If you are considering a major purchase, a house or car, obtain a copy of your credit report and learn your credit score. If your score is below 680, then you can benefit from credit report repair services. If you have a past bankruptcy, credit repair may be beneficial.
Some credit repair companies suggest options which are illegal. The only way to be sure that credit repair after bankruptcy or bad credit repair of any kind is legal is to choose a law firm that specializes in credit repair. They are aware of all laws regarding credit repair issues and they can advise you of your legal rights. For more information about bankruptcy credit repair services, visit the Credit Repair Blog.
The writers and editors of the Credit Repair Blog are dedicated to providing accurate information about credit repair after bankruptcy or at any time. Visit us at http://creditfixnow.blogspot.com
Popularity: 17%
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