Tag Archives: bankrtupcy

Using credit cards and boosting your credit score after bankruptcy

 

After a bankruptcy discharge of those pesky debts you don’t miss, your available cash flow is increased and you should have more spending power. Your credit score is a function of several variables, not a mean person sitting in judgment of you. As you have more cash flow and spending ability, the decision to extend credit to you is easier because you are more likely to pay the bills when you can afford to. Once you get new credit cards there are a few things you should do to maximize your opportunity to boost your credit score.

Your credit score is determined by a variety of financial factors:

  • Credit card utilization
  • Payment history
  • Derogatory marks
  • Age of credit history
  • Total accounts
  • Hard inquiries

When you use credit cards and are working on boosting your credit score to qualify for a new home, many credit advisors will tell you to use your credit cards but not more than 30 or 40 percent of the available credit rating. It’s a good idea to pay your fixed expenses such as phone or internet with the credit card. Since you know you must pay that bill anyways, why not build your credit?

The next step with the credit cards is setting up automatic minimum monthly payments to be made by your debit card or checking account so you never have to worry about a late payment. When you pay your bill, which is easy to do now on apps on your phone, do not pay the entire balance. It is better to leave a few dollars on your balance so that it appears you are actively using the card – once a month the credit cards send a report to the credit bureaus and if your balance is zero it may look like you are not using the card and that can damage your credit score.

About us: Joseph Wrobel, Ltd., works with clients to find out if they qualify for Chapter 7 or 13 bankruptcy, and their options and rights under the law. The firm will also advise and assist clients with questions and concerns about the collectors and their rights to pursue you.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start.

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The automatic stay: It has exceptions and there are ways you could lose its protection

In a previous article about the automatic stay provision of the bankruptcy code we lined up a few situations in which this section of the bankruptcy law stops bill collectors in their tracks. As a general rule, when a petition for bankruptcy relief is filed and accepted by the bankruptcy court, the automatic stay provision is effective and remains in place until the bankruptcy is over.

As a debtor, you do not have to do anything to use your automatic stay benefit. Rather, all your listed creditors should receive notice sent by your bankruptcy attorney informing them about the bankruptcy and the law prohibiting collection of debts while you are in a bankruptcy case. Having said so, it is important to note the scenarios in which actions and obligations cannot be avoided through a bankruptcy filing.

There are some legal actions not stopped by the automatic stay:

  • Tax proceedings are allowed to proceed despite the automatic stay provision in bankruptcy.
  • Pension loans are still collectable and are properly withheld from an individual’s paycheck to repay a loan from a qualified pension.
  • Divorce proceedings continue and are not stopped by a bankruptcy filing. The automatic stay does not affect child support and spousal maintenance cases, however the underlying factors leading to the bankruptcy might impact financial outcomes.
  • Child custody and visitation proceedings also continue in family court despite a bankruptcy case. Paternity of children can also be established with no concern for a bankruptcy matter.

It is possible to lose the protection of the automatic stay:

  • If you had an earlier pending bankruptcy case filed within one year of your current case, the judge might not allow your automatic stay protection to take effect, based on certain facts and circumstances.
  • If there are deadlines you must meet for addressing collateral property securing other debts, and you fail to comply, you might lose your automatic stay protection.

Eviction cases have special rules where the automatic stay will not matter:

  • Creating a dangerous situation or condition or using illegal substances in connection with a rental property can lead to eviction the automatic stay will not prevent.
  • Landlords obtaining judgments of possession before a tenant files for bankruptcy can still have tenants removed despite an automatic stay, in most cases subject to exception.

The bankruptcy code is full of general rules, exceptions and conditions in which exceptions might not apply. It is important to talk to an experienced bankruptcy attorney to find out how the automatic stay provision of the bankruptcy code can help you in your specific situation.

Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’s Facebook page and Follow Joseph Wrobel. Ltd. on Twitter. If you need immediate legal assistance, please call Joseph Wrobel, Ltd. by calling (312) 781-0996 to talk to an attorney today.

Bankruptcy Basics: July Answers to Frequently Asked Questions

Chicago bankruptcy and consumer credit attorney Joseph Wrobel shares news and updates in bankruptcy law as well as business and consumer financial matters. It has been documented that financial troubles can cause all sorts of ailments, the most common of which is sleeplessness. Joseph Wrobel helps clients alleviate their anxiety created by the inability to pay bills and the embarrassment of financial distress.

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Topics and types of FAQ covered in this 30 minute show:  

  • Do I need to list my ex-spouse on my petition for bankruptcy relief?
  • Are personal bankruptcy cases published in the newspaper; will anyone find out?
  • Can I add creditors that were omitted from my bankruptcy or do I have to re-file?
  • What happens in a marriage when one spouse files a petition for bankruptcy?

Joseph Wrobel has been a practicing attorney since 1973 and has experience in a wide variety of law relating to legal matters for individuals and families. Wrobel helps clients get out of debt and get a fresh start. He is an active member in several bar associations and the Bankruptcy Panel of Pro Bono Program of the Chicago Volunteer Legal Services. After serving the U.S. Army Reserve 363rd Civil Affairs Unit, Wrobel earned a B.A. in Psychology from Northwestern University and in 1973 he earned a JD from DePaul University Law School.

Visit our Chicago Bankruptcy Site online for more about the firm. You may also contact Joseph Wrobel for more information at (312) 781-0996 and by e-mail at JosephWrobel@ChicagoBankruptcy.com

Credit scores, cards and reports: What you might not know

Credit cards and our credit scores have become parts of our lives and daily business to the extent that losing them can paralyze people experiencing financial hardship. Financial troubles leading people towards a bankruptcy filing are not always the individual’s fault. A divorce, injury or job loss can happen and leave good people in peril with their credit scores and credit cards. There is a saying among bankruptcy attorneys – what happens after the bankruptcy is more important than what brings the client to seek bankruptcy in the first place. There are plenty of options to restore credit and the ability to make online payments. Do not give up and throw in the towel or go off the grid because creditors suggest that if you file bankruptcy you will never be able to swipe a tank of gas or cover an emergency expense.

Why is credit important and why do we need credit and debit cards to pay?

Fair or unfair as it may seem, the American system of issuing credit is what keeps the economy moving. Do you remember the problems our country experienced at the beginning of the recession? One of the biggest problems was failure and refusal of banks to issue credit for consumer goods, homes, cars, and to businesses with fixed expenses. The method of payment nowadays is plastic. We pay our bills online and over the phone using debit and credit cards. When was the last time you went to a local utility to pay with cash or check? The reality is that it is easier and sometimes only possible to pay using plastic. People considering bankruptcy should know there are easy alternatives to what we often think about when talking about credit and debit cards.

Filing for bankruptcy in most cases will not affect most people’s checking accounts and the debit cards used to pay for bills and daily expenses. If however, the account is overdrawn and no payment is made, the account can be sent to collections and opening a new account could be difficult. An alternative is the pre-paid debit cards now offered by many banks. They work just like a traditional checking account based debit card. A difference can be that the pre-paid cards, just like gift cards, prevent the user from overdrawing the account. Prepaid debit cards holders can access their accounts online, deposit, withdraw funds, and continue despite credit and bank account options.

Pre-paid credit cards, also known as secured credit cards, are similar to prepaid debit cards with the exception that the applicant prepays a certain amount (often under $500) and that money is held in a separate savings account. The card is “secured” by the deposit and the use may proceed to use the card just like a regular credit card and pay the monthly bills. If the bill is not paid, the deposit is forfeited. A major benefit of the pre-paid credit card is the positive effect on the credit score. If the person is in a bankruptcy and some of the immediate financial pressure is off, it is easier to use the pre-paid credit card for common monthly bills. As the credit card is used and paid in a responsible manner the credit score should improve.

Getting back on track can also include challenges to inaccuracies on credit reports.

In cases where damage to credit scores are a provable fault of another, the damage to the credit score can be translated to a specific dollar amount using a credit damage expert who prepares a report for court hearings where the credit damage is at issue. There are also credit repair companies who, for a reasonable fee, help people find and attack inaccurate marks on a credit report including something referred to as “zombie debt,” which often indicates collection amounts that are frequently bundled and sold among collection companies. Note that debt repayment companies offer different services and it is important to get the right answers before making important decisions that can affect the future.

How can Joseph Wrobel help?

Joseph Wrobel and the attorneys at Joseph Wrobel, Ltd. have relationships and can help clients with everything from stopping harassing collector calls to helping clients get new forms of debit and credit cards to keep moving and paying bills as well as attack bad credit report marks and scores.

If you want to learn more about bankruptcy and credit management, contact an attorney at Joseph Wrobel, Ltd. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. To keep in touch and read about consumer finance news and stories you can Like the firm’s Facebook page and Follow Joseph Wrobel. Ltd. on Twitter. If you need legal assistance, please call Joseph Wrobel, Ltd. by dialing (312) 781-0996 to talk to an attorney.