The law prevents harassment by a debt collector. It is harassment if they call you at work?
My latest Ask Brent video discusses this. You can watch it here: httpv://www.youtube.com/user/MyCredEd.
Remember to ask your questions about credit and debt in the form to the right. I will answer via blog or video as soon as I can!
When you fill out the form, your question goes straight to my email inbox. I am an email addict, so I will see it quickly. If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.
Posted In: Collections, debt collection
In Tip 10, I discuss how to start watching your finances and why it is important to pay attention to your money.
I have posted a video series to the MyCredEd YouTube channel discussing how you can protect your credit during divorce. Remember, your divorce will be over soon, but the effects of a credit problem can last years longer!
You can view the Tip 10 video here:
Remember to ask your questions about credit and debt in the form to the right. I will answer via blog or video as soon as I can!
When you fill out the form, your question goes straight to my email inbox. I am an email addict, so I will see it quickly. If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.
If you are going through a divorce, your thoughts are probably not focused on what your credit score looks like. However, this is exactly the time to think about these issues!
I have posted a video series to the MyCredEd YouTube channel discussing how you can protect your credit during this tough time. Remember, your divorce will be over soon, but the effects of a credit problem can last years longer!
You can view the Introduction video here:
Remember to ask your questions about credit and debt in the form to the right. I will answer via blog or video as soon as I can!
When you fill out the form, your question goes straight to my email inbox. I am an email addict, so I will see it quickly. If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.
The statute of limitations for your state determines how long you can be sued for a debt. However, if you treat your debt wrong, the state of limitations can be reset and the clock starts over.
My latest Ask Brent video discusses this. You can watch it here: httpv://www.youtube.com/user/MyCredEd.
Remember to ask your questions about credit and debt in the form to the right. I will answer via blog or video as soon as I can!
When you fill out the form, your question goes straight to my email inbox. I am an email addict, so I will see it quickly. If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.
If you have filed for bankruptcy, you are going to have to repair your credit.
The question becomes when do you start? My latest Ask Brent video addresses this. You can watch it here: httpv://www.youtube.com/user/MyCredEd. You can also see my blog entry on this subject by clicking here.
Remember to ask your questions about credit and debt in the form to the right. I will answer via blog or video as soon as I can!
When you fill out the form, your question goes straight to my email inbox. I am an email addict, so I will see it quickly. If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.
The debt collector can get a lot of information about you. However, do they have the right to see your bank records?
My latest Ask Brent video addresses this. You can watch it here: httpv://www.youtube.com/user/MyCredEd.
Remember to ask your questions about credit and debt in the form to the right. I will answer via blog or video as soon as I can!
When you fill out the form, your question goes straight to my email inbox. I am an email addict, so I will see it quickly. If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.
Recently, I have been getting a bunch of questions about credit, debt, foreclosure, bankruptcy, and other topics about credit.
The first couple of entries are already on YouTube, and you can see them here: httpv://www.youtube.com/user/MyCredEd
It can take a long time to write a blog entry, and I just don’t always have the time. So, I decided to go ahead and release some videos that answer the questions.
Here is how this works:
See the form to the right? You ask your question there. Just type in what you want to know, and I will work on answering it. Now, I can’t guarantee that I will answer every question, but I will do my best.
When you fill out the form, your question goes straight to my email inbox. I am an email addict, so I will see it quickly. If I put your question into a video, or answer it in a blog, I will send you and email back to let you know the answer is ready.
I am working hard to grow this blog, and I want to grow it in a way that helps you. So, please ask your questions!
Again, you can find the videos on YouTube right here:
http://www.youtube.com/user/MyCredEd
Well, it is over. You filed bankruptcy, and met with the trustee, and your bankruptcy case is over. You now either have a schedule of payments with a Chapter 13, or you wiped most of your debt clean with a Chapter 7.
But there may be a few assets that you decided to keep that you have to re-affirm. When you re-affirm the debt, you are promising to pay the debt off according to a new payment amount and schedule. It may be the same as it was, but it may not.
When I re-affirmed my truck, my credit union offered to let me do a ‘cram down’. I was upside down on my truck, meaning I owed more than it was worth. The difference was about $4,500.00. My credit union knew that I was unlikely to want to keep the truck, since it was no longer worth what I owed.
If the credit union had taken the truck back, not only would they have lost the extra money I owed on it, but they also would have lost the money paid to the auction house that sold it, and whatever the lower amount was that it sold for. My banker told me they were looking at losing about $8700.00 on the truck when all was said and done.
So, they opted for a different route. By bringing my truck loan down to the current market value, I saved money, they saved money, and they would make a bit back on the interest that I paid.
For me, this was a great deal. I got to keep the truck, and my payment was reduced. For my credit union, It was a decent end to a bad situation.
If you are re-affirming a debt, and the debt has a well-define market value, be sure you talk to your lender if you owe more than what your property is worth. It may be easier to keep your debt than to try to get a replacement for your property.
Make sure you take a hard look before you do this though. My truck had some problems that I still had to get fixed, and it ended up that I could have gotten a loan for a different car. It wouldn’t have been as nice, but there would have been no cash out of pocket for the new vehicle, while I had to pay for repairs to my truck.
You have to be honest with yourself. If your financial life is bad enough that it is time to consider bankruptcy, or if you have already filed, you are putting the biggest black mark available on your credit report. This isn’t trivial. For the next 10 years, anyone who pulls your credit reports will see a public record entry that says “BANKRUPTCY”. It might as well be in neon blinking letters, because it is one of the first things a creditor looks for after your credit scores. You will affect every debt that was included in bankruptcy, and your credit vendors may decide to cancel the cards you didn’t include.
Let’s look at why it is so bad. When you file bankruptcy, you include a list of creditors, including the account number, for each account that you no longer want to be liable for. So, let’s say you have 5 credit cards, a mortgage, and a car loan. You would have 5 items on your list of creditors. When the court accepts the document that describes these debts, they will contact each of those creditors and let them know that you are including that account in bankruptcy. At that point, the creditor can no longer call you or try to collect their money. In fact, many larger firms won’t talk to you at all. AFNI collections forbids their collectors to take a call from a person who filed bankruptcy because they are worried about getting sued.
The creditors on your list are done with your debt. They are going to take a charge-off against their taxes for bad debt. When they do that, the also add a charge-off notation to your account. So, suddenly you have 7 charge-offs on your credit. Charge offs are bad things in the eyes of a creditor. Creditors don’t like to see an indication that you won’t pay them back.
When your bankruptcy is final, your creditors are notified that the bankruptcy has been dismissed. At that point, each of your debts included in the bankruptcy will get a notation saying something like “Included in Chapter 7 Bankruptcy” (if you filed chapter 7 of course). So, those 7 accounts just got worse. See, in the credit report, we can’t see how far apart events occurred. We can only see that a debt was charged off, and then was included in bankruptcy. This looks like 2 big black marks to a potential creditor, and your scores really suffer.
Here is what an account included in a bankruptcy looks like:
|
GEMB/ELECTR |
|||||||||
| Account No.: | 603********* | ||||||||
| Condition: | Closed (Paid) | ||||||||
| Balance: | $2412 | ||||||||
| Type: | Charge account | ||||||||
| Pay Status: | Collection/Chargeoff | ||||||||
| Past Due: | $601 | ||||||||
| High Balance: | $2412 | ||||||||
| Terms: | |||||||||
| Limit: | $6500 | ||||||||
| Payment: | $72 | ||||||||
| Opened: | 08/18/2002 | ||||||||
| Reported: | 10/24/2007 | ||||||||
| Responsibility: | Individual | ||||||||
| Late Payments (last 7 years): | |||||||||
| 30 Days Late: 3 | |||||||||
| 60 Days Late: 2 | |||||||||
|
90 Days Late: 3
|
As you can see, there are 2 big hits here. The first is in the Pay Status field, where it shows Collection / Chargeoff. This indicates that the account was either sold to a collection firm (and probably charged off), or possibly just charged off. Either way, this is bad news for you. When a creditor finds this on your report, they know you didn’t pay. You may also have noted that on this particular account, Experian and Equifax are NOT showing the debt as included in bankruptcy. This error is your first real break in getting an account removed.
Also on there, in the bottom of the report entry, is a text area describing the actions taken by the creditor. Each credit bureau describes it differently (which is why I am showing all 3), but the end result is the same. You have a very bad thing, a bankruptcy, on your report.
The final bad item that goes on your credit report is the Public Information entry for your bankruptcy. Let’s take a look:
Bankruptcy
|
Type: |
Chapter 7 Bankruptcy |
| Status: | Discharged |
| Date Filed/Reported: | 10/15/2005 |
| How Filed: | Individual |
| Reference #: | 05***** |
| Closing Date: | 02/08/2006 |
| Court: | Federal District US BKPT CT |
| Liability: | $0 |
| Exempt Amount: | |
| Asset Amount: | $0 |
| Remarks: | |
| [TransUnion] | |
| [Experian] | |
| [Equifax] |
As you can see, this is a chapter 7. The ultimate black mark on your record. A bankruptcy. From a credit report standpoint, it can’t get worse than that. You may have heard that creditors love you after a bankruptcy because you can’t file again for 6 years. Well, that may have been true once. But you can still stop paying, and if you do that once, you are pretty likely statistically to do it again.
One thing to note: You can do what is called a ‘reaffirmation’ with a creditor to keep a debt. So, as an example, your car loan can be reaffirmed, and you keep the car and payments. However, your creditor will probably write a new loan, and if the new loan is for less than the balance of the old loan, they will still charge the difference off.
If you are considering filing bankruptcy, you should know that your credit won’t be the same for 10 years. You are going to have to work hard to rebuild, and it does take time. Explore your options with an attorney, and make sure you understand the implications of bankruptcy.
To get a copy of my FREE e-Book ‘The Top Ten Ways You Can Wreck Your Credit’, just click the link. You will be taken to a page where you can get more information about downloading the e-book. This book tells you what you should avoid doing concerning your credit, and what negative impacts can occur if you treat your credit wrong.
Posted In: Bankruptcy
