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Bankruptcy |
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About 9 1/2 years ago I filed for Chapter 7 Bankruptcy . My question is how can I get this off my credit history once I hit the 10 year period . Can I hire your services to do this? Please let me know. Thank you.
- Jose Jr. in NYC.
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Dear Jose,
To get the bankruptcy off your credit history, all you have to do is wait. The Fair Credit Reporting Act dictates that a bankruptcy stay on your credit report for up to ten years. When the ten years is up (and yours almost is), the bankruptcy notation should come off the report automatically. To verify that this has been done, you may want to pull a copy of your credit report. MMI recommends that you review a copy of your report annually anyway.
One last note: You never should have to hire anyone to help with credit reporting issues. Be wary of companies that try to sell you credit repair services!
Susan
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Five years ago I declared bankruptcy! You are right about it being the biggest mistake a person can make. Unfortunately, no one explained that to me at the time! Since that time I have purchased nothing on credit. I need a new vehicle and I am tired of paying rent on a home. I could really use some limited credit purchases. Is there a way to obtain some limited credit for these types of items? Could you direct me to a source?
- LKR
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There are plenty of lenders out there that will finance someone with a bankruptcy. A quick search on the Internet will result in hundreds of potential lenders. Keep in mind that lenders make credit decisions based on a number of factors, not just whether or not you’ve filed for bankruptcy.
Because you have not used credit for many years, you may want to begin building a good credit rating by starting small. A secured credit card is easy to obtain and can help you to establish yourself as credit worthy.
Please be aware that you may have to pay high interest rates because of your past credit history. Be sure to read and understand all of the terms and conditions of any new loan.
Good Luck,
Susan |
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I am recovering from a past bankruptcy that was released 7/98. Since then I feel I have been punished by having to pay almost 25% for my first post bankruptcy car loan. I traded that car in and got a lower rate which is now almost 17%. It makes it hard to ever get good credit terms... what can I do?
- Mary
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Mary,
I understand your frustration. Bankruptcy has many side effects and unfortunately many consumers do not understand the full impact until it’s too late.
A bankruptcy stays on your credit report for up to ten years and will continue to affect your ability to obtain favorable credit terms until that time. Think of it from a creditor’s perspective. They need to determine what kind of risk they are taking when lending you money. When someone has filed for bankruptcy, they are considered a greater risk and are therefore often charged higher rates.
On the bright side, a bankruptcy’s negative effects will lessen as the bankruptcy ages and you continue to use credit wisely.
Susan |
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I would like to know which is worse on your credit filing bankruptcy or getting into a debt relief program where you save up money and reach settlements with your creditors to pay them off?
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"Worse" is hard to define and it really depends on your individual situation. A notation that you filed Chapter 7 bankruptcy will remain on your credit bureau file for up to 10 years. No matter what your payment record is like before you start a program, or while on the program, the longest a creditor can report a poor pay history on your credit bureau file is 7 years. Very seldom does a creditor submit a derogatory report for 7 years for clients participating in a DMP. A temporary blemish might be noted but after a client successfully completes a program, all negative comments are generally removed.
So the question becomes, would you rather start a DMP and "possibly" have a blemish on your credit bureau file for a "maximum" 7 years or would rather file for bankruptcy and be guaranteed to have a blemish for a "minimum" 10 years. A blemish on your credit bureau file will not necessarily stop you from getting credit but I can guarantee you a bankruptcy will hinder you from getting any type of credit (at a reasonable interest rate) for 10 years. A bankruptcy can also prevent you from opening a bank account, getting insurance or getting a better job.
Hope this helps,
Susan |
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If I do this program would it be considered bankruptcy? - Penny
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Dear Penny,
It is not a bankruptcy; it’s an alternative.
A debt repayment plan is a voluntary program for both you and your creditors. MMI serves as a neutral, third party negotiator. The plan allows you to repay your debts—with terms you can live with—without having to file for bankruptcy.
MMI does not report to the credit reporting agencies. Call to get started today.
Susan
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Should I file bankruptcy? I have about 35 to 40 thousand dollars'worth of debt. I have failed with Debt Management agencies in the past. In addition, I have fallen into another trap-- check writing with three different cash advance stores, and I don't know who to repay first. Can somebody help?
- Randy
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Dear Randy,
We consider bankruptcy as a last resort, but it is necessary for some people. One reason debt management can be such an effective alternative is because it helps teach people responsible spending habits-- something that bankruptcy does not do. If you want to try a debt management plan again, please call 800-762-2271. Your counselor might also be able to help you with some budgeting techniques.
If you do choose to file, please understand that you will have to be extremely committed to making some life changes so that you do not get into this situation again. You should also know that not all debts are dischargeable. Debts not dischargeable in bankruptcy will generally include back taxes less than 3 years old, student loans, alimony, child support and debts incurred through fraud. To avoid foreclosure or repossession, you must make home and auto loan payments.
Best of luck with your decision,
Susan |
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We owe about 35k. Our income is about 85k, our rent is 1100, and we live in a high tax state. Is bankruptcy a better option? Also, what would our monthly payments be? Thank you for your help.
- Mr. Jones.
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The decision to file for bankruptcy is strictly a personal one. We cannot tell you whether you should or shouldn't file for bankruptcy. All we can do is give you advice and alternatives. If you file for bankruptcy, this will be noted on your credit bureau file and possible remain for up to ten years.
Our suggestion is to call MMI at 1-800-762-2271 and speak to a financial counselor. Your counselor will analyze your income, expenses and overall financial situation; discuss possible solutions and make recommendations for you to consider. Your counselor will explore the possibility of a debt management program (DMP) which allows you to make reduced monthly payments to creditors. The DMP serves the dual role of helping you repay your debts and helping creditors collect money owed them and is an alternative to bankruptcy.
After talking to your counselor and going over your income, expenses and debt, your counselor can come up with a payment amount to get you out of debt in a realistic amount of time. Good luck.
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What's the worse that can happen if I file for bankruptcy. I think you should know that I am a student and that I have several loans out. I just want to file for bankruptcy as far as the credit cards go.
- Bikim
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If you file for bankruptcy, a notation that you filed will be entered on your credit bureau file. This derogatory notation can remain on your credit bureau file for 10 years. While this bankruptcy notation is on your credit bureau file, you could be prevented from getting credit, a job, insurance, an apartment or opening a checking and/or savings account. |
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Why don't you just tell people to file for bankruptcy, then they can spend their wages on their families instead of on banks?
- Harry
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Not everybody wants to file for bankruptcy. People are looking for an alternative to bankruptcy. We offer an alternative.
Bankruptcy is often looked at as a ten year mistake. When you file for bankruptcy, a notation to this effect can remain on your credit bureau file for up to ten years. This can prevent you from getting credit in the future. You can also be denied a checking account, insurance, apartment lease and a better job. These are all negatives a bankruptcy can cause that most people try to avoid.
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My wife and I have been talking about consolidating our credit card accounts and going for financial counseling soon. We owe about $31,000 plus 2 car loans. Also, the IRS has sent us a 90-day letter telling us to pay $16,000 for a 1998-99 audit conducted last year. I plan to apply for a Small Business Administration loan in order to buy new equipment for my company and generate additional income to get us out of this horrible situation. What information should we take to the appointment in order to come up with the best plan for our situation. We feel bankruptcy or sending letters to creditors will hurt our chances of getting the SBA loan.
Thanks for your help - Charlie
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When you call for an appointment, you will be sent forms asking for all resources (income, assets), a listing of your household expenses and a list of all debts owed. This information is essential to assessing your situation and possible solutions. All information is kept confidential. No calls or letters are sent without your say-so.
I understand your apprehension regarding letters affecting the SBA loan. But be aware that your debt-loan and IRS deficiency may be bigger factors in the decision. I figure your credit card payments are upwards of $600 a month and a $16,000 payout to the IRS is about $450 monthly. Adding car payments, you probably make debt payments of about $1650 each month, apart from housing costs.
But I'm only estimating. I don't have a full picture. In a counseling session you and the counselor will develop that picture and explore your options. I urge you to call MMI (1-800-762-2271) as planned.
You're in a rough place. I wish you the best. |
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