Posted on August 20, 2019 in Bankruptcy

You've filed bankruptcy and eradicated the debt that's been hanging over you for months or years. Now it's time to start planning for the future. While bankruptcy does offer the chance for a fresh start, it also causes an immediate hit to your credit score. With time and careful management of your resources, you can help your credit bounce back.

1. Secured Credit Cards

Some people have difficulty finding lending opportunities after bankruptcy. Creditors may be unwilling to take a chance on someone with a recent bankruptcy on their record. A secured credit card could be the solution. When you get approved for a secured credit card, you make a cash deposit to the lender. The deposit is typically the same amount as your credit limit. You get your deposit returned after making on-time payments for a set amount of time. Secured cards often have high-interest rates, so use them as a credit-building tool and keep a low balance.

2. Make All Payments on Time

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 Posted on July 20, 2019 in Debt Collection

There's a reason that debt collectors have such a bad reputation-they are aggressive and often blatantly disregard the law in their attempts to get a payment from a debtor. Even worse, most consumers do not know their rights or are too ashamed of their financial situation to advocate for themselves. Even if you are behind on payments, you do not deserve to have your rights ignored. If a debt collector tries these practices, they could be in violation of state or federal law. Companies that break debt collection laws may have to pay the victim a fine for each and every violation.

1. Calling After Being Asked to Stop

If you do not wish to receive calls anymore, you can request that all communication regarding your debt be done in writing. You should make this request in writing and send it via certified mail. If the collector continues to call after receiving this letter, they are violating the Fair Debt Collection Practices Act.

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 Posted on April 20, 2019 in Bankruptcy

Many people worry about their ability to secure loans, find housing, or apply for jobs in certain industries if they have a bankruptcy affecting their credit score. Knowing what to expect can help you make an informed decision.

A Sudden Decrease in Your Credit Score

Don't be surprised or panicked if you notice a sudden drop in your credit score at one or multiple bureaus. Bankruptcy is a derogatory mark on your credit report, and it can significantly decrease your creditworthiness in the eyes of lenders. This is especially true if your accounts are current or only slightly delinquent, as your credit score may not have been seriously impacted by your growing amount of debt. While it is hard to accept a decrease in your credit score, don't worry. There are many ways you can strengthen your score over time.

When Bankruptcy Can Help Your Credit Score

In some cases, bankruptcy may only have a brief minimal negative effect on your credit score, followed by a rather speedy recovery. If you waited until bankruptcy was unavoidable, you may have many delinquent accounts, accounts in collections, and defaulted accounts. If that is the case, keep in mind that a credit score can only go so low - 300 in the case of a FICO score. But when your debt is discharged in bankruptcy, all of these negative marks are quickly removed from your credit report, and your debts are reported as being discharged. Therefore, even with the impact of a bankruptcy on your credit report, your credit score can improve rather quickly.

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 Posted on March 20, 2019 in Bankruptcy

When you have more debt than you can handle, it can take over your whole life and rob you of your peace of mind. Chapter 7 bankruptcy is a way to discharge eligible debts, give yourself a fresh start, and work toward a more secure financial future. There is no 'payment plan' in Chapter 7. Instead, your debts are simply 'wiped out' upon receiving a discharge. The Chapter 7 bankruptcy process in North Carolina is relatively straightforward for individuals with modest income and assets, and we explain it in this blog.

Are You Eligible?

The court system uses a means test to determine whether or not an individual qualifies for Chapter 7 bankruptcy. The means test analyzes your income and compares it to the state median income. If your income is above the median, you may still file Chapter 7 if you are unable to pay at least $6,000 over the next five years to your creditors. If you can afford more than $6,000 but less than $10,000, you may qualify if you are unable to pay at least 25% of your unsecured debt. A bankruptcy attorney can help you sort this out.

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 Posted on February 20, 2019 in Debt Collection

We've all heard horror stories about debt collectors going to extremes. Many agencies call debtors multiple times a day, pretend to be family members to get the person to answer their phone at work, and leave obscene and harassing voice messages. Some collectors even tell their victims that failure to pay a debt is a criminal offense when in reality the collection agency is the one breaking the law.

What is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act, or FDCPA, is a consumer protection law that was passed on September 20, 1977, after aggressive debt collector actions were connected to a steady rise in consumer bankruptcies. It imposes guidelines on how third-party debt collectors may communicate with consumers and prohibits the use of deceptive and abusive business practices.

What is a Third-Party Debt Collector?

A third-party debt collector is not an original creditor, such as a bank, hospital, or car dealership. Instead, it collects debts on behalf of others. The U.S. Court of Appeals for the Third Circuit recently held that the FDCPA also applies to debt buyers who purchase portfolios of old or non-performing accounts and attempt to collect them.

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