Some of the more common bankrutpcy mistakes

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1. Paying back Uncle Joey

Yes, I know he's the godfather to your children, but the law prohibits you from treating family better than your other creditors. In fact, a bankruptcy trustee can reclaim (go after) any amount repaid to a family member within one year of filing bankruptcy. [c1]

2. The credit card run up mistake

Running up your cards once you decide to file...Charges for luxury goods and services owed to a single creditor, totaling to more than $500 within 90 days of filing, are usally not covered under a bankruptcy and you will have to pay them. Ditto on cash advances totaling more than $750 for all creditors within70 days of filing. Don't jeopardize your fresh start by running up your credit cards.

3. Using retirement $$$ to pay debts

You worked hard to save in that 401k don't drain their retirement accounts in a futile attempt to pay down credit card debt! Retirement accounts are generally protected (you get to keep them) when you file bankruptcy.

What other services does Bellinson Law offer?

Rebuilding Your Credit

Rebuilding your credit after bankruptcy can be both a financial and emotional experience. You will feel a great deal of relief once you get your bankruptcy discharge—it’s the fresh start you deserve!

Once your bankruptcy has been discharged; rebuilding your credit begins immediately. After the bankruptcy, be sure and pay any continuing obligations, such as a car payment or rent on time. Being on time on each of your commitments is the surest way to raise your credit score as quickly as possible. 

Within three months of your case being completed you should apply for a new credit card. Either approach your bank or apply on www.creditcards.com for a low limit MasterCard or Visa. Expect to pay a hefty annual fee, but it is worth it. You will immediately raise your credit score if you make your payments on time and pay in full. Be smart, use the cards for purchases you need, not just want and make sure to set the money aside in advance to be able to pay the bill. Remember, the card is not just a “credit card” it is a credit TOOL.

After a few months with the low balance card, you will be solicited for other credit cards with higher limits and lower annual fees. You should accept one of these cards, but please be smart. Don’t use the cards for items you can’t afford. Remember, this is a tool to rebuild your credit. You should have the money available to for each purchase you make. Don’t let the credit card company charge you interest, pay each bill in full and always on time.

After a few months with the second credit card, your score should be climbing to the mid-600’s. This is when you can consider using newly strengthened credit to purchase bigger ticket items, such as a car. Speak with a lender before you go to the dealership. Know how much credit you have and how much of a down payment will be necessary. Remember, this too is a tool to rebuild your credit.

This simple plan is a 18-month post bankruptcy credit repair program. I have had thousands of clients succeed using these steps. A 700 credit score is between 1 ½ to 2 years away for most of my bankruptcy clients. Get started by eliminating your debt and eliminating your stress. Bankruptcy is the ultimate financial stress reliever.

To learn more how to rebuild your credit post bankruptcy, or to learn how filing bankruptcy can let you improve your credit score quickly, call (305) 663-3281 now.

How long does the process take to file for bankruptcy?

What is Bankruptcy?

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is often called the "Fresh Start" bankruptcy. Individuals are generally discharged of many types of unsecured debts such as credit cards, personal loans, medical bills and some judgments. Filing a Chapter 7 bankruptcy immediately stops your creditors from trying to collect. As a result, creditors cannot garnish your wages, empty your bank account, or go after your car, your house, and your personal belongings.

In a Chapter 7 bankruptcy, the individual is allowed to keep certain exempt property. Each state has its own set of exemptions and our qualified bankruptcy attorneys will be able to outline the type of property that is exempt from liquidation in a Chapter 7.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is significantly different from a Chapter 7 bankruptcy. A Chapter 13 is a reorganization of debt, allowing debtors to repay all or a portion of their debts through a Chapter 13 plan, while protecting property and personal assets. The concept is similar to debt consolidation, but unlike most debt consolidation programs, it permits debtors to pay unsecured debt (i.e., a debt that is not secured by property) down without accruing interest (student loans are an exception) and without having to deal with those annoying calls from debt collectors.

Under a typical plan, you make monthly payments to a court-appointed bankruptcy trustee for generally three to five years. The amount of your monthly payment is determined by several factors, such as the amount of debt you have, your ability to repay and the extent that you have assets.

The bankruptcy trustee distributes the money to your creditors.

Contact us now at 305-663-3281 for free consultation.