Unsecured Credit Cards for Rebuilding Credit after Bankruptcy

You truly can have excellent credit again after a bankruptcy. You can have a credit score of 750 even before the bankruptcy mark falls off your credit report if you begin working hard on your credit score immediately after your bankruptcy proceedings are over. Once you receive the discharge notice from bankruptcy court, you can show this discharge paperwork to creditors and you may be offered new credit lines.

After filing for bankruptcy, you will likely start to receive numerous credit card offers. Some will be unsecured, which means you do not have to give the lending institution any money in order to open the credit card. When opening a new credit card, the higher the limit, the better it can be for your credit score (or worse, if you fail to keep the balance low). 

As with secured credit cards, you must be careful of upfront fees and also find out if the lender will report your credit card activity to all three major credit bureaus - Experian, Equifax and TransUnion.

With an unsecured credit card, you should be able to request and receive a credit line increase every 12 months. 

Also, you should try to avoid carrying a balance on your cards. The fastest way to improve your credit score is to only use the card if you can pay it off in full each month or within a few months. It's always great to speak o an experienced attorney who understands the pros and cons.

Richard Croce - Rich@rrc-llc.com

Secured Credit Cards for Rebuilding Credit after Bankruptcy

If you work hard, you can have excellent credit again after a bankruptcy. Even before the bankruptcy mark falls off your credit report, you can have a credit score of 750 again, if you begin working hard on your credit score immediately after your bankruptcy proceedings are over and you receive the discharge notice from bankruptcy court. You will need to show this discharge paperwork to creditors before you will be offered new credit lines.

One of the easiest ways to start reestablishing credit is with a secured credit card through a local bank or credit union. A “secured” card means that you give the bank or credit union an amount of money to hold, and they give you a credit limit equal to that amount. Unfortunately, many secured cards have extremely high up-front fees to open the credit line.

Before opening a secured credit card, you should ask whether the bank will report the card to all three major credit bureaus – Experian, Equifax and TransUnion. You should only open a secured card with a bank or credit union that reports your activity to all three of these bureaus. You should also find out how soon you can increase your limit on the card. Some banks will allow you to have secured cards up to $10,000. You would have to deposit the amount of money to increase your card’s limit, but the higher the limit and lower the balance, the faster you can improve your credit scores.

You should also be sure to find out if the bank or credit union will ultimately give you an unsecured credit card. Many banks or credit unions want to see at least one to two years of good payment history before they will offer an unsecured credit card. They should provide this information prior to opening the card. Be sure to consult a bankruptcy attorney to find out what are your options.

What are the Benefits of Filing Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is sometimes referred to as a wage earner's plan. Chapter 13 bankruptcy allows a debtor with regular income to offer a repayment plan to repay debt in installments over the course of three to five years.

If a debtor’s current monthly income is less than the state median where they reside, the plan will typically be set in place for three years. If their income is more than the applicable state median, the repayment plan is typically set up for five years. A repayment plan cannot exceed five years. As long as the debtor complies with the repayment plan, creditors are forbidden by law from starting or continuing collection attempts.

One of the most significant benefits of filing Chapter 13 is the opportunity to save your home from foreclosure. Chapter 13 gives a debtor the opportunity to make their delinquent mortgage payments over the term of their plan, while making current payments. Another benefit of Chapter 13 is that it has a special provision that protects co-signors. In chapter 13, the debtor makes planned payments to a trustee who distributes payments to creditors. Creditors are not allowed to have direct contact with t debtors while under chapter 13 protection. A no cost consultation with an experienced Bankruptcy Lawyer in CT RRC-LLC can help you decide if Chapter 13 Bankruptcy is best for your situation.

What are the Benefits and Advantages of Filing Chapter 7 Bankruptcy?

The main purpose of filing bankruptcy is to give deserving debtors an opportunity for a fresh start Chapter 7 bankruptcy is the most common form of bankruptcy filed in the United States. Businesses and individuals can file Chapter 7 of the United States Bankruptcy Code. The Chapter 7 filing process involves liquidating nonexempt assets and distributing the proceeds to creditors in accordance with the provisions of the U.S. Bankruptcy Code. In keeping with providing deserving debtors with a fresh start, the Bankruptcy Code allows you to keep certain exempt property.

The benefits of filing a chapter 7 petition include the following:

•    Stop harassment from creditors
•    Stop all collection efforts from creditors
•    Halt foreclosure proceedings temporarily; which may give you time to negotiate a modification to your mortgage or find an alternative to foreclosure
•    Discharge eligible debts, which may, among other things, enable you to modify mortgage debts
•    Debt can be discharged in a relatively short amount of time, since Chapter 7 proceedings take only about three to six months to be completed
You should consult with an attorney before filing a petition under chapter 7, or any other chapter of the Bankruptcy Code. You should also be aware that debt counseling or out of court agreements may be an alternative to filing bankruptcy. A no cost initial consultation with an experienced Connecticut Bankruptcy Attorney, RRC-LLC, can help you decide which route is best for your situation.