Bankrupcty and improving your Credit Score

Most people considering filing for bankruptcy are of course concerned about how bankruptcy would affect their credit score, and how quickly they can rebuild their credit.  Here are some surprising facts:

• Filing for bankruptcy may help your credit score!  Researchers at the Federal Reserve Bank of Philadelphia found scores typically fell in the 18 months before people filed for bankruptcy and rose steadily after filing.  The average credit score before filing was 538.2 and by the time the bankruptcy was discharged – it takes only a few months in a Chapter 7 – the average rose to 620.3.
• You can continue rebuilding your credit core with a “Credit-Builder Loan” from your local credit union.  These loans put the money you borrow – usually in the $500 to $1,000 range – into a certificate of deposit or savings account that you can claim once you’ve made 12 monthly payments.  Your payments are reported to the credit bureaus, so you can build a decent credit history and save money at the same time.
• Another alternative is using cdfifund.gov to find a local community development institution that offers Credit-Builder Loans.
• SelfLender is a private service that also offers these types of loans.  This is a private company and we offer no endorsements, but we really like their website, which offers a lot of useful financial information, such as Resources > How Credit Works.
• You can accelerate you credit score’s rehabilitation with a secured credit card.  You make a deposit, typically $200 to $2,000, with the issuing bank and get a credit line equal to that deposit.  You should use the card regularly, but make sure you pay the balance in full every month, and don’t charge more than about 30% of its credit limit.
• If and when your score reaches the mid-600s, you can apply for a regular credit card.  Get as high a limit as possible – after a few months you can call in and have your limit raised – as the higher limit means your balance % will be lower – again, 30% or lower is preferred – and this will help your credit score.

In short, don’t believe all the “naysayers” when it comes to bankruptcy.  The more you learn about bankruptcy, the better.  Bankruptcy is not for everybody… but it might be for YOU.  For more information, check www.GomezSimoneBK.com or better yet, call 888-219-3333 for a 30-minute free consultation with a Bankruptcy Attorney.

Saving your home is not a time to try to save money:  Homeowners Need to hire a Bankruptcy Attorney for Chapter 13 Bankruptcies

April 28, 2016

I had a new client come in this week.  She had just found out – via an eviction notice – that she had lost her home to foreclosure.  Naturally she was extremely upset, yet also very hopeful.  You see, she had filed a Chapter 13 bankruptcy shortly before her home was sold to the highest bidder at auction, and while the case was dismissed soon after, her home was indeed sold while her bankruptcy case was open.  Naturally, I was also excited, as I was licking my chops to sue a lender for violating “the Automatic Stay”, collecting “362K punitive damages” and possibly even reversing the sale and returning her home to her and her family.

Sadly, hope and optimism were shortly shattered when I researched her bankruptcy filing history.  My new client had decided that a bankruptcy attorney was not necessary, and saved some money by hiring a low-cost “save your home” paralegal service.  The paralegal service appeared to do a competent job helping my new client draft her petition, and knew enough to send a notice of bankruptcy filing to the foreclosure trustee so they would cancel the foreclosure auction.  They even filed a motion to give her an extension to file the balance of her bankruptcy schedules.  Unfortunately, they did not know enough to realize that my new client had no automatic stay protection at all – in short, the bankruptcy filing was a complete waste of time and money.  Why?  Because the service did not know enough bankruptcy law to check her filing history.  If they had checked, as I did, they would have seen that she had two previous bankruptcies open within a year of filing.  Neither case lasted long, but simply the fact that both cases were open during the twelve months prior to this filing meant that this filing provided zero protection against foreclosures (or any other incoming creditor action).

Saddest of all, my new client and her service could have imposed “Automatic Bankruptcy Stay” protection simply by properly drafting and filing a motion.  In short, my new client lost her home because she did not hire a bankruptcy attorney to file her Chapter 13 case.  Of course, she now realizes that one’s home is “priceless,” and that the effort to save it is no place to skimp and save.  Sure, attorneys are not cheap.  But keep in mind that we are obligated to know the law, and can suffer the consequences if we don’t.  On the other hand, if a non-attorney makes a critical legal mistake such as what happened in this case, they can just say “sorry, but I’m not an attorney.”

I’ve been in court and have heard many different bankruptcy judges tell people representing themselves, “I can’t give you legal advice, but I can say that very few people have had a successful chapter 13 case without an attorney.”

So if you are a homeowner facing a sale date on your home, please remember these two main points:
(1)  You can not only stop a foreclosure sale, but take yourself out of default and permanently solve your mortgage issues with a chapter 13 bankruptcy.
(2)  If you decide to take this route, hiring a bankruptcy attorney will almost always be worth it.

Chapter 13 Bankruptcy is the perfect financial tool if you are in foreclosure, currently have a steady income, and it has been less than a year (maybe two) since you made your last mortgage payment.  Remember, you can seek a loan modification from your lender during the case, and if you receive one, you can dismiss your chapter 13 at any time without penalty.  You can also often discharge credit card debt, sometimes remove liens on your home, and even discharge junior mortgages in certain cases.  Gomez & Simone is experienced in this area and is here to help if you have any questions.

-Stuart R. Simone, Esq.

“What Chapter 13 can do for you?

November 20, 2015

There is no doubt that Chарtеr 13 cases are muсh mоrе complicated than Chарtеr 7 cases.

Individuаlѕ usually rеоrgаnizе undеr Chарtеr 13, which offers a ѕtrеаmlinеd рlаn аt an affordable соѕt. The plan аllоwѕ the individuаl tо kеер роѕѕеѕѕiоn of his assets, саtсh uр on ѕесurеd debt, and discharge unѕесurеd debt аt the end of thе рlаn.”

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TO READ THE ENTIRE ARTICLE CLICK HERE

The Attorneys at Gomez & Simone are ready to help you with debt consolidation, settlement, debt management or filing of Bankruptcy.

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Filing Chарtеr 11 Bаnkruрtсу

October 20, 2015

Occasionally, Chарtеr 11 is used as are placement of Chapter 7 for protections. Firms are directed towards Chapter 11 bankruptcy when they need help for reorganizing their debts, like whеn a buѕinеѕѕ iѕ unаblе tо ѕеrviсе itѕ dеbt оr рау itѕ creditors, thе business оr its сrеditоrѕ can file with a fеdеrаl bankruptcy соurt.”

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TO READ THE ENTIRE ARTICLE CLICK HERE

The Attorneys at Gomez & Simone are ready to help you with debt consolidation, settlement, debt management or filing of Bankruptcy.

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WHAT YOU DIDN’T KNOW ABOUT BANKRUPTCY

September 15, 2015

Most people know that credit cards are dischargeable. However, we wanted to go over some items that most people might not about, that are in fact dischargeable in Bankruptcy. To start, “dischargeable” means that the money owed is wiped out and gone, forever. Donald Trump for example filed for bankruptcy a number of times and in the right situation it can be a wealth creation tool.”

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TO READ THE ENTIRE ARTICLE CLICK HERE

The Attorneys at Gomez & Simone are ready to help you with debt consolidation, settlement, debt management or filing of Bankruptcy.

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