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Do You Understand Chapter 13?

July 24th, 2018 Comments off

The global financial crisis was a downturn of such unprecedented scale that many Americans were caught completely unawares and far from prepared. Without easy credit available many Americans found that their liabilities and expenses far outweighed their ability to pay for them. The number of bankruptcies filed increased dramatically due to the tightening of credit markets.

Many people considering filing for bankruptcy think of the more traditional Chapter 7 bankruptcy procedure first. This typically involves the wholesale liquidation of the petitioners assets, although there are some items that are exempt. Most unsecured debts, like credit card debt and medical bills, are discharged. Today, the United States Trustee who oversees Chapter 7 bankruptcies also imposes a strict means test, which may deny Chapter 7 relief to persons making enough money that the bankruptcy claim appears to be abusive.

However, there is an alternative to Chapter 7 bankruptcy available, Chapter 13 bankruptcy. Chapter 13 bankruptcy is also known as reorganization bankruptcy because it involves reorganizing the debtors finances in such a way as to allow eventual repayment. The Chapter 13 option is useful for people that have nonexempt assets that they wish to keep (assets that would be liquidated under Chapter 7) or people that have a predictable income and can technically pay off their debt if it is adequately restructured. Importantly, Chapter 13 also extends special protection to third parties that may be liable for debts, such as a co-signer or spouse. Unlike a Chapter 7 liquidation that discharges debt within a few months, Chapter 13 filings lead to the creation of a Chapter 13 reorganization plan that remains in effect for three to five years.

There are certain restrictions that come into play when considering a Chapter 13 petition because it is a reorganization of finances rather than a discharge of debts. To be eligible a debtor must be able to demonstrate a reliable income that will be steady for the duration of the reorganization plan. Once a steady income is proven, then living expenses are subtracted and if there is money remaining to make significant payments the petitioner will qualify. However, any unsecured debts over $336,900 and secured debts over $1,020,650 will disqualify a petitioner.

Along with the above restrictions, stockbrokers and commodity brokers are not permitted to petition for Chapter 13 protection, for business or personal finances. However, most people will qualify in spite of the basic restrictions involved.

Because the filing process for a Chapter 13 is so complicated, the filer needs the help of a professional to make sure paperwork is correct and complete. Because it is a bankruptcy a fee will generally be required up front before the professional accepts the job and it is important to begin the filing process before the situation is too dire. A Chapter 13 bankruptcy can be a good solution for professionals and others with a solid income; self-discipline is absolutely necessary to make the reorganization work the way it should.

Wendy Polisi is the founder of Credit Repair College and Finance the Dream. Credit Repair College empowers people to take control of their financial future by learning everything they need to know to repair credit on their own. For more information on credit repair please visit them on the web. Finance the Dream offers lease options throughout the United States.

How To Fix Your Credit Score

October 12th, 2017 Comments off

One out of each ten American is facing the trouble of poor credit rating. If you are too facing the same trouble and are in search of a credit repair program then there are a number of sure fire solutions, including:

Your primary step towards repairing your bad credits should be to find out what has been reported about you in your credit report. Getting credit report is inexpensive and simple. You must know that you can also get free credit report of yours from the lenders who have disapproved you credit in the recent past.

Anyone in debt should first be aware that there is no perfect solution to fixing your credit; no legitimate ways if you will. Stay away from mediators that make “promises” to solve your bad credit through loopholes and such. There people are misguiding and usually put you in a worse credit position than you started in because you just used your credit card to pay them. This can get you in a heap of trouble. So, it is wise to seek professional advise from a law firm or similar to truly fix the issue.

It is essential to cancel most of your credit cards in order to fix the issue. If you can’t function without one, then only keep ONE and make sure to keep in only for emergencies. The big problem with having a bad credit score is that it makes it harder to get that credit card you may need down the road.

Please be honest with yourself. I cannot emphasize this enough. The biggest problem, as you can guess, is people spending money where they do not need to. Cut your expenses in any way you can. You must know that this will make your life much worse if you do not, right? If you don’t know that, you are in trouble. Try and increase your income. If you can do these two things, no matter how small at first will increase your credit to debt ratio, the biggest area lenders look.

It is important for the borrowers to make a special check over if the credit report is erroneous or not. Around 40% credit reports have flaws in them and so the borrowers must write to the credit bureaus about potential errors in their credit report. You must email all the details to the credit bureau by only a licensed mail so as to keep a track of the official who is handling the case of fixing up flaws in your credit report.

It is your right, and I will add your responsibility, to make sure everything that could raise you score is included in the report. It is not just simply looking for bad marks and making sure they are legit. You can also make sure your earnings are correct. If you had a recent pay increase, make sure it’s there and if not tell the bureau. If you have paid off a loan completely but it still appears let someone know.

If you need help fixing your bad credit, visit a specialist from SBFC at Home of SBFC Law Group Utah or Home of SBFC Law Group Utah Caton Hanson.

Tips For Raising Your Credit Scores

November 15th, 2016 Comments off

Let me start off by saying that understanding how the three major credit bureaus arrive at your credit score is one of the most powerful pieces of knowledge you can have. Most likely this is not something that you have ever been taught. In fact, when it comes to your credit scores, the three major credit bureaus, Equifax, Experian, and Transunion, run sort of a “black box” operation.

To explain what makes up your credit score in as simple terms possible, this is how it works

Payment History 35%: This is the largest contributing factor for your credit scores and represents your history of making payments with your creditors.

Utilization of Credit 30%: This represents the percentage of available credit against the amount used. Here is where we will focus our activity for this article.

Credit History 15%: A more seasoned account carry more weight than one that was just opened.

Inquiries 10%: When you apply for credit, an inquiry is made to your credit. If you have too many inquiries, your score can be negatively effected.

Types Of Credit In Use 10%: How many accounts and which types. Having too many loans from finance companies (Beneficial Finance, American General, etc.) can bring down your scores.

Ok, now we have some powerfull knowledge. It’s time to put it to use with 2 things we can do in about 30 minutes to increase our credit scores…

Raise your limits! Raising your credit limits is much easier than you might think. Most people don’t realize that just by simply asking for a credit limit increase, you will most likely get one. We have proven this over and over again with clients. Just call the phone number on the back of your credit cards, and tell them you are considering transferring the balance to another card with a higher limit and lower interest rate, but that you would like to keep the account if they could just raise the credit limit. In my personal experience, it has worked 100% of the time. Often they will also lower the interest rate as a bonus. Lowering the interest rate will not help your credit score, but it will sure help your finances.

Let’s say for example you have a credit card with a $5,000 credit limit, and you currently have a $4,000 balance on it (80% utilized). After your quick phone call, they agree to raise your credit limit to $6,500 (now 62% utilized). This alone will immediately increase your credit scores. Remember in the “Credit Utilization” section above, we want to ideally keep our balances below 50% of the credit limit. This brings us to the next powerful tip.

Bring your balances down! Let’s continue from the above example where you are now 62% utilized on your credit card. If you were to pay down $750 on this card, you could bring the balance down to $3,250 on a card with a limit of $6,500, and that would put your at 50% utilized. Now not everyone has the ability to pay more than the minimum payment on their cards, and that’s ok, you have already raised your scores. However, at 50% utilization, you will be able to maximize your scores. Now imagine if you did this on all your credit card accounts. Now, consider this… If you could raise your scores and get a better interest rate and lower monthly payments on a mortgage loan, or auto loan, you could save thousands over the life of that loan.

If you use these powerful techniques, you are sure to increase your scores quickly and easily. I have seen it work over and over. One recent client was able to increase their credit scores by 105 points after getting the credit limits raised on all three of their credit cards in less than 30 minutes. You have nothing to lose by making a couple calls.

These simple tactics are more appropriate for someone with a good payment history on established credit card accounts. It is recommended that you have at least 3 open credit card accounts to maximize your scores. One of these could be a department store account. If you don’t have enough credit, or have a negative credit history, perhaps more aggressive credit repair or credit building strategies would be more appropriate for you.

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Free Credit Repair Information – Things to Look Our for in Your Quest for It

July 10th, 2015 Comments off

The credit repair industry is an enormous industry at present. It seems like companies are popping up in every corner. Also, there are online sites showing up all over the Internet about credit repair. A lot of them are designed to give you information for free to confuse so much that you’ll click on a credit repair company’s ad. Others actually do want to give you good help and good free credit repair info. The fact is that credit repair is not difficult if you understand it and if dealing with credit has been part of your profession. However to the ordinary person, it can be a puzzle.

Having researched the topic I would like to provide some tips for good sources to check out for free credit repair information. The first source to check out is the Federal Trade Commission. Simply search “FTC credit repair” and it will be the first link in Google. Read that page and read the PDF file too.

The next useful place to visit is credit repair forums. There are many on the web. Users there often ask about things, and people with real experience, even professional credit repair agents, provide answers to the questions. However, you could read for days on these forums. They will all offer you the basics and they all go into depth on many aspects of free credit repair information. These are very worth your time and energy.

One other excellent thing to seek out is sites that provide software people can use to produce personalized credit repair letters. There are a few of them out there, but you may have to do some searching to find them. After all, they are free services so they don’t have ads all over the net. Just be aware that there are sites where you can use this software for free. And they shouldn’t require you to download anything to your computer to use it. If they ask you for your credit card information or to download something, my advice is that you leave that site. Look for “self credit repair” and be looking for services that offer truly free use of software online. They can help you produce your credit dispute letters in a matter of minutes.

Matthew Wierzbinski is the owner of http://CreditBlossom.com, which offers both written and video instructions on how to repair your own credit. It also offers the public free use of its amazing credit repair letter generating tool, the Credit Repair Letter Wiz™, which can be found at http://creditblossom.com/Content/LetterGeneratingTool.aspx .

Free Credit Dispute Letters – Finding them, Fixing Them, and Using Them

October 30th, 2014 Comments off

A quick search on the web will find you an abundance of free credit dispute letters. There are plenty of them. First, though, look on the FTC’s credit repair web site. This site gives you the fundamentals of credit repair and they also give you a free credit dispute letter sample to use for free.

Whichever free credit dispute letter you want to use, do not stop there. You should find 3 or 4 different free credit dispute letters that you can use. You don’t want to use just one letter template to create all your credit repair letters with. Finding a variety of templates to use will result in a higher success rate with your letters.

Additionally, you should not use the free credit dispute letters you find just as they are. You should alter a few words, and you should use multiple font sizes and styles. Putting in a couple of typos can also make them look more ‘original’. Make sure that the letter is legible when it is printed! If it’s at all illegible, the person with the credit bureau dealing with your credit repair letter will not even bother to try to read it. Tell the credit bureau how distressed you are about the things that are reporting incorrectly on your credit report. Don’t use foul words, but do be forceful.

Whatever website that you find your free dispute letters should also give you a good idea what information you need to include in the credit repair letters so that you make your dispute correctly. You can also find resources online that enable you to generate the credit repair letters using a free, online credit repair system. This will make your life a lot easier since it will save you the trouble of having to actually write out the letters or find templates. One such excellent service is CreditBlossom.com. This website walks you through the process and helps you automatically produce your self credit repair letters.