Tag Archive for: credit score

Credit Cards To Help Build Credit

Credit Cards To Help Build Credit

If you are looking for credit cards to help build credit, then you are thinking about your future. If your credit is already damaged, you may not be able to obtain a traditional credit card for the purpose of rebuilding your credit. In that case, the easiest way to build credit with a credit card is to obtain a secured credit card.

Secured Credit Cards And Building Credit

With a secured credit card, the user places a security deposit down when opening the account. The bank holds the deposit until the account closes. While this may feel like fictitious credit, remember that your goal is to rebuild your credit.

With a secured credit card, each month you place a few new charges on the card. Then, at the end of the month, you pay them off (or make the minimum payment). So long as you make your payments on time, the issuing bank will report to the credit bureaus for you. Those reported payments appear on your credit report the same way that unsecured card payments appear on your credit report. As a result, as you continue to make on-time payments over the course of many months, your credit score builds simultaneously, and the secured credit card helps build your credit. An article by Nerd Wallet lists some of those most popular secured credit cards.

Bankruptcy And Your Credit Score

While it is true that a bankruptcy filing will initially lower your credit score, the individual planning for the future should consider bankruptcy as a way to discharge an insurmountable debt. On the heels of your bankruptcy filing, your credit score will begin building again. First, after bankruptcy, you can apply for the secured credit cards mentioned above. Second, your debt to income ratio improves in your favor—even though your income has not increased, your debt has gone down dramatically. Finally, traditional lines of credit begin to open to you within six months after your bankruptcy discharge is entered.

Our clients routinely report to us in the first year after bankruptcy that they receive offers for vehicle financing and credit card offers. At the two-year mark following bankruptcy, clients often reach out to us for a copy of bankruptcy paperwork to provide to their mortgage lender. This means that two years after the discharge in bankruptcy is entered, clients are getting approved for a mortgage. This is incredible news.

Bankruptcy And Your Credit Report

While bankruptcy can remain on your credit report for up to ten years. This is true. Most of the credit bureaus remove it after seven years. In any event, what you do with your credit after bankruptcy carries more weight than the bankruptcy remaining on the credit report. Remember, clients, are getting mortgages two years after filing bankruptcy. By taking careful steps to build credit post-bankruptcy, you can negate the fact that the bankruptcy remains on your credit report for several years.

Bankruptcy And Credit Cards To Help Build Credit

If you exercise your right to file bankruptcy,  you get the benefit of discharging your unsecured debt. When you combine a Chapter 7 or Chapter 13 filing with active steps to rebuild credit with secured credit cards immediately after filing bankruptcy, you are on your way to achieving your financial goals.

Speak With A Charlotte Bankruptcy Lawyer Today

If you would like to speak with a lawyer about secured credit cards, bankruptcy, or any other aspect of building your credit, please reach out to us at 704.749.7747 or click HERE to request a free phone consultation. We know you have choices. We hope you choose Layton Law.

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When Does Bankruptcy Fall Off Your Credit Report?

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When Does Bankruptcy Fall Off Your Credit Report?

This is a great question and shows an eye toward the future. The good news is that you will be extended credit much sooner than the date by which the bankruptcy will fall off your credit report. In this article, we will touch base on the timeline for when bankruptcy falls off your credit report, and also try to give some indicators as to when you can expect to be extended credit after filing bankruptcy.

Your Filing Date and Chapter Filed

If you filed Chapter 7, it will be 10 years after the filing date before the bankruptcy falls off your credit report. If you file Chapter 13 it will be 7 years after the filing date of your bankruptcy. One thing that may affect this timeline is your original delinquency date on the debt. If an account was delinquent upon filing, it will be deleted from your credit report seven years from the original delinquency date. It is noteworthy that filing bankruptcy does not extend the original delinquency date or change the date by which the account will remain on the credit report, per an article by Experian.

When Can I Get Credit Again?

The desire to know when you will be able to get credit again makes sense. We know you’re interested in getting credit after bankruptcy because you have a goal of rebuilding your credit score. If you filed a Chapter 7, you will typically be able to get credit again about three months after your discharge is entered. Interest rates will be high but if your goal is to build your credit score, you should focus on charging some items each month and paying the balance each month. This way, you are not paying interest.

If you filed Chapter 13, it will be about three to five years from the date of your filing. This makes sense, as Chapter 13 is typically a 36 or 60-month plan. Many of our clients qualify for new automobiles and refinances during an active Chapter 13. Hopefully, this helps to demonstrate that you will continue to have access to credit even after filing bankruptcy.

When Can I Qualify For A Mortgage After Filing Bankruptcy?

According to Realtor.com, you will need to wait two years after bankruptcy in order to qualify for mortgage lending. This matches with what we see over and over from our clients as well. Consider what an amazing solution this is—you file your bankruptcy, receive a discharge of thousands of dollars of debt, and two years later you are back in the home purchasing market. This gives us and our clients tremendous excitement for the future as we work together to prepare their bankruptcy filing.

Speak With A Bankruptcy Lawyer Today

As you can see, even if your focus is when bankruptcy falls off of your credit, the truth is you will have access to credit much sooner than the number of years it takes for bankruptcy to no longer show on your credit report.

If you’d like to speak with an attorney about filing bankruptcy, call us at 704.749.7747 or click HERE to request a consultation. If you’d like to hear a little bit more about our firm, you can watch Chris Layton in a one-minute introduction video. We know you have choices. We hope you choose Layton Law.

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Debt Consolidation For Credit Cards

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Debt Consolidation For Credit Cards

If you are considering debt consolidation for credit cards, you need to read this blog post. First, it is important to know there are a few ways to consolidate your credit card debt. Each program being offered will be different. In any case, first, we will quickly go over the different types of debt consolidation, and then discuss a few pitfalls and other options.

Types Of Credit Card Debt Consolidation

Balance Transfer – When you do a balance transfer you are essentially transferring several credit card balances to one credit card. It could be due to a low introductory rate, or some other special terms, which are more favorable than the prior card or cards.

Debt Consolidation Loan – Some banks will offer you a loan that you can use to pay off your credit card debts. You will be left with one balance on the loan, and usually at a lower interest rate than the credit cards you paid off.

Debt Management Program – This is the most traditional form of debt consolidation. In this instance, you work with a credit management company. They establish a payment structure for you and a timeframe. The credit management company negotiates with your creditors to lower your balances. Usually, the negotiated amount is contingent upon you completing the consolidation plan.

Three Common Pitfalls To Credit Card Debt Consolidation

Fees And Costs – Whether the fees come in the form of high interest or third-party fees charged by your credit card management company, it is important to understand what fees you are being charged. The lengthy contracts consolidation companies provide you with can be difficult to sort through. The point is you are paying for a service. You are entitled to know how much the service is costing you. This way, you can comparison shop and set your bottom line for how much it is costing to eliminate your debt.

Dropping Out Of The Consolidation Program –

Many debt consolidation agreements are contingent upon your completion of the term. The term may be for three or more years. During that timeframe, anything could happen which might prevent you from being able to make your payment on time. You want to be aware of the penalty for late or missed payments, and get confirmation that you will not lose the progress you made along the way by making consistent on-time payments in the program.

Worrying Too Much About Your Credit Score –

It is important to be concerned about your credit score. You should think carefully before spending thousands of additional dollars for the sole purpose of sparing a few credit score points. As a bankruptcy attorney, I speak with clients every day who are worried about their credit score. I do my best to help them see the full picture. Often, those clients already have a reliable vehicle and own a home. If that is the case, I encourage them to look at the upside to eliminating the debt—no matter how they choose to do it—instead of obsessing over how it will affect their credit score.

What Other Options Are There?

Bankruptcy is worth considering. Both Chapter 13 and Chapter 7 are options in consumer bankruptcy. Every bankruptcy attorney I know in Charlotte, North Carolina will give you an honest answer as to whether you should file bankruptcy or not. This means you should consider having a free consultation with a bankruptcy lawyer to make sure you understand the cost of bankruptcy versus the cost of debt consolidation. If a client can eliminate $25,000 of unsecured debt by filing bankruptcy for under $3,000, it is going to be difficult to justify a debt consolidation program that charges $525 a month for 36 months.

Debt settlement is another option. Because we are a bankruptcy law firm, we obtain good results for clients attempting to settle the debt. When you are settling a debt with a creditor, you are proposing to pay them a small portion of the debt in 90 days or less, in exchange for forgiveness of the remainder of the debt. To accomplish this, you must have access to a lump sum of money to pay the creditor. It is not uncommon to receive a dramatic reduction from the outstanding balance in exchange for timely payment of a small percentage of the debt. In a prior post, we have discussed how a debt settlement affects your credit score.

Speak With A Bankruptcy Lawyer Today

If you are considering consolidating credit card debt, you deserve to understand all your options. We would be happy to discuss bankruptcy, debt settlement, and credit card consolidation with you. Then, we can help you make the decision that will work best for you. Sometimes, just one phone call is all it takes to discover you have more control over the situation than you thought.

If you would like to speak with a bankruptcy attorney, call us at 704.749.7747 or click HERE to request a phone consultation. Consultations are free and answering questions is part of our job. We are here to help.

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Does Bankruptcy Ruin Your Credit?

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Does Bankruptcy Ruin Your Credit?

No, bankruptcy does not ruin your credit. In fact, bankruptcy may ultimately be the reason you are finally able to restore your credit. We understand your credit score is an important factor in deciding whether to file bankruptcy. While the initial filing of a bankruptcy will temporarily lower your credit score, most debtors find that their score recovers within a year from filing bankruptcy.

Your Debt To Income Ratio

One important aspect of your credit score is your debt to income ratio. The filing of bankruptcy changes your debt to income ratio in your favor. This immediately serves to help you rebuild your credit. Additionally, as a result of your bankruptcy, your credit report will show fewer debts. You become an attractive client to creditors when your debt to income ratio is healthy. This means you will be considered for credit cards, automobile loans, and other extensions of credit.

How Quickly After Bankruptcy Will My Credit Score Recover?

Most of our clients tell us that their credit score bounces back at the one-year mark from filing bankruptcy. However, this will fluctuate depending upon how high your score was before filing bankruptcy, and depending upon the steps you take to rebuild your credit after bankruptcy. If you are making payments on a secured credit card or a vehicle after bankruptcy, those positive payment reports will serve your credit score well.

Free Yourself From The Chains Of Credit Card Debt

Credit card companies want you to fear bankruptcy. They would rather you give them every extra penny you have, to keep them from taking further action against you for non-payment. This is true regardless of whether your monthly payment to them makes even the slightest dent in the balance owed.

The bigger picture when deciding whether to file bankruptcy involves regaining your financial freedom. The relatively small price to pay for that financial freedom is the time it takes to rebuild your credit. When bankruptcy clients call us two years after their bankruptcy to tell us they have gotten approved for a home mortgage, they usually tell us the same thing: I never should have waited as long as I did to file my bankruptcy.

Speak With A Charlotte Bankruptcy Lawyer Today

If you have questions about how bankruptcy can help your credit, we are here to help. Once a client decides to file bankruptcy, we advise you to stop paying on any debt which will be discharged by the bankruptcy. If you would like to speak with a bankruptcy lawyer, call us at 704.749.7747 or click HERE to request a free consultation by phone or in person.

 

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5 Myths Surrounding Bankruptcy

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5 Myths Surrounding Bankruptcy

Bankruptcy is surrounded by myths, and they keep eligible individuals from pursuing what can be an amazing way out of crippling debt and financial stress. You deserve freedom from the anxiety caused by the myths surrounding bankruptcy. We hope this article helps. And if you have any questions, we’re here to answer them. Just reach out to us.

#1 All Bankruptcy Filings Are The Same

To understand and debunk some of the myths about Chapter 7 bankruptcy, we must first understand how Chapter 7 bankruptcy differs from Chapter 13 bankruptcy. While both are consumer bankruptcy options, Chapter 7 bankruptcy is typically used in a situation where the client has limited income and assets and does not have the ability to pay back all or even some of their debt. Chapter 13 bankruptcy is a tool for catching up on a delinquent secured debt like a mortgage or car. It is also a compromise where you pay back some of your debt while completing a court-approved repayment plan.

#2 Bankruptcy Will Stay On My Credit Report Forever

While effects of a Bankruptcy on your credit report can vary due to the case, the credit reporting of a Chapter 7 bankruptcy lasts a maximum of ten years. Some credit reporting agencies remove the bankruptcy after seven years. Some of these credit report references to bankruptcy include trade lines that state that your account was included in a bankruptcy, and third-party collection debts, judgments, and tax liens discharged through bankruptcy. More importantly, your credit score and your ability to get a loan or credit card recovers much faster than this time frame. We see this with clients year after year.

#3 My Credit Score Won’t Improve Until The Bankruptcy Is Gone From My Credit Report

While your post-bankruptcy credit score will show a drop after filing, you will be surprised at how quickly your credit score begins to recover. One reason is that by way of bankruptcy, your debt to income ratio improves in your favor. Additionally, creditors are more likely to lend you money because they know you have no other debt, and they know you can’t file bankruptcy again. Often, the same creditors you included in your bankruptcy filing will offer you new extensions of credit shortly after you file.

Obtaining a secured line of credit and making payments on it, or taking out a new credit card and making payments on it, will help you to raise your credit score with the goal of hitting the range of 700-749 over time. Making on-time payments for all debt, adding and paying new credit, and keeping your credit card balances under a thirty percent utilization are all examples of ways to boost your post-bankruptcy credit score.

#4 I’ll Never Have Credit Cards Again

While we secretly hope this is true for you, we hope it’s because you choose to never have a credit card again. The truth is, as this article has indicated so far, you’ll be given lots of opportunities to have a credit card after filing for bankruptcy. Truthfully, credit cards are actually one of the best ways to build credit, and options for that post-bankruptcy do in fact exist.

Credit cards that require an upfront security deposit, are called secured credit cards and have a lower barrier of entry but allow you to spend and rebuild credit just like any other kind of credit card. After you make consistent payments on a secured credit card, you will see your credit score increase and other credit opportunities arise.

#5 I’ll Never Get A Home Loan After Filing Chapter 7

Similar to credit cards, when paid on time, loans help you to rebuild your credit score and certain loans are easier to receive after having filed bankruptcy. Credit builder loans, CD loans, or Passbook loans, are similarly secured with a deposit or collateral and will all help to rebuild your credit score. These loans are easier to procure due to the simple fact that the lender is protected in the event that you are unable to pay, which makes them a great opportunity to rebuild your credit scores in the meantime. If you’re repaying a vehicle loan, you’ll also see the benefits by way of an increase in your credit score.

Generally, at the two-year mark after filing bankruptcy, our clients who have diligently re-built their credit after bankruptcy, find they are eligible for a mortgage. A more conservative estimate would be two to four years; however, we receive so many phone calls at the two-year mark from clients who are excited because they are buying a home, that it’s worth mentioning here.

Speak With A Charlotte Bankruptcy Lawyer Today

If you are considering filing bankruptcy, it’s important that you speak with a Charlotte bankruptcy attorney. The call is free and you will come away with a much better understanding of your options. You can reach us at 704.749.7747 or click to request a FREE CASE EVALUATION, and we will be in touch shortly.

Further Reading

If this article regarding myths surrounding bankruptcy was helpful, you may find other helpful articles on our Bankruptcy Blog. Thank you for visiting the website—we hope it has been helpful.

 

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What Does Bankruptcy Do To Your Credit Score?

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What Does Bankruptcy Do To Your Credit Score?

Bankruptcy affects your credit score differently, depending upon what your credit score is just prior to filing. You can expect that your credit score will drop after filing bankruptcy, but it will also recover quickly if you take the right steps after bankruptcy to increase your credit score.

If your credit score is above 650 before filing bankruptcy, you can expect a significant drop in your credit score, according to Experian. However, you should remember that your purpose for filing bankruptcy is less related to your credit score and more related to being able to balance your budget. You can recover your credit score after the debt is gone.

If your credit score is below 650 before filing bankruptcy, you can expect your credit score to drop but not in a significant way. In fact, your credit score will bounce back within a year from filing the bankruptcy and go up from there.

Does Chapter 7 Affect My Credit Score Differently Than Chapter 13?

When it comes to your credit score, it does not matter what chapter of bankruptcy you file. Some clients feel better about filing a Chapter 13 than a Chapter 7 because in Chapter 13 you are paying back some of your debt. We encourage clients to file the chapter of bankruptcy that makes most financial sense for them. We help you to make that decision, of course.

Improving Your Credit Score After Bankruptcy

Keep in mind that while filing bankruptcy lowers your credit score, you will also get a bump up in your score when your debt to income ratio changes. While filing bankruptcy doesn’t change your income, it does change your debt. As a result, your “debt to income” ratio changes in your favor. This is one of the key factors used to calculate your credit score.

Once your bankruptcy case closes, the key to improving your credit score is to make payments to creditors who will report your payments to the credit reporting agencies. Most commonly, mortgage payments and vehicle loan payments are a way to do this. If you do not own a home or car, you can take out a secured credit card at a local credit union. This is a quasi-credit arrangement where you give the credit union a small amount of money. Then, each month, you spend or borrow against that money by making purchases on the card. When the monthly statement comes, you pay it off. In exchange, the credit union will report your payments as positive payments to the credit agencies and it will help build your credit.

Speak With A Charlotte Bankruptcy Lawyer Today

If you are considering filing bankruptcy, it’s important that you speak with a Charlotte bankruptcy attorney. The call is free and you will come away with a much better understanding of your options. You can reach us at 704.749.7747 or click to request a FREE CASE EVALUATION, and we will be in touch shortly.

Further Reading

If this article regarding “What does bankruptcy do to your credit score?” was helpful, you may find other helpful articles on our Bankruptcy Blog. Thank you for visiting the website—we hope it has been helpful.

 

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Should I File Bankruptcy?

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Should I File Bankruptcy?

We know this is a common question: “Should I file bankruptcy?” We know the idea of filing Chapter 7 or Chapter 13 bankruptcy can be daunting. The decision may bring up feelings of guilt or fear or even shame. Our very strong advice is to ignore those things and focus on you and your family. Bankruptcy is an extremely powerful form of relief that can dramatically change your life for the better.

Myths Surrounding Filing Bankruptcy

There are a few myths surrounding filing bankruptcy. It’s worth it to make sure you know the facts. Here are a few things that keep people from filing, when they deserve the relief of bankruptcy:

Nobody Else Files – This just isn’t true. In fact, statistics show us how many people have filed for bankruptcy between 2006 and 2017. All types of individuals file for bankruptcy, including lawyers, doctors, and politicians. Like you, they are often a victim of bad circumstances. Bankruptcy represents a solution.

Everyone Will Know I File – This is not true. While the filing is technically public knowledge, it is a federal filing. We get calls from lawyers every week asking us to use our login to access a bankruptcy filing. This should tell you that it’s not that easy to find a list of people who have filed for bankruptcy. Your neighbors won’t know.

My Employer Will Know – Generally, your employer is not made aware that you filed for bankruptcy. If you have a job that requires you to be bonded for handling large sums of money, we make sure to discuss that with you; otherwise, we have yet to have a client report back to us that they have had problems with their employer. If you are ever in a position to discuss your bankruptcy, your response is an easy one: I did the best thing for myself and my family, and things are much better now.

My Credit Will Be Ruined If I File Bankruptcy – Not true. For most individuals, your credit will drop about 75 points when you file. About a year after filing, your credit score will be back to what it was right before you filed. From there, it should only go up. We provide all of our clients with guidance regarding credit score repair as well.

I Won’t Be Able To Buy A Car – Not true. Within the first year after filing bankruptcy, you will receive offers for vehicle financing. Should I file bankruptcy if I could never buy a car again? Probably not. But you’ll find that’s just not true.

I’ll Never Have A Credit Card Again—Not true. You’ll receive plenty of credit card offers from the same banks whose debt went away in bankruptcy. Another reason why you shouldn’t lose sleep over banks not getting paid if you file bankruptcy.

Overcoming Feelings Of Guilt

We know guilt is a real feeling. If you listen to any motivational speakers, they would acknowledge guilt as an obstacle between you and your goal of financial freedom. Many motivational speakers tell you that in order to overcome an obstacle, you should focus on what happens if you DON’T take action. The fear of that will usually be enough of an incentive to help you overcome the obstacle. During conversations with our clients, we focus on the client, their family, and the future. If bankruptcy is going to provide the refresh necessary to kick start a great future, we encourage the clients to ignore the guilt.

Speak With A Bankruptcy Lawyer Today

If you’re considering filing bankruptcy, it helps to speak with someone. That’s why we’re here. Call us today at 704.749.7747 or click for a FREE CASE EVALUATION and we will reach out shortly. The future is bright—bankruptcy could be a crucial step to making it a reality.

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Does Debt Settlement Affect My Credit Score?

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Does Debt Settlement Affect My Credit Score?

Yes, you can expect that a debt settlement will negatively affect your credit score. Most reliable sources such as Experian.com, and Creditkarma.com indicate that if your credit score is 700 or higher, you should expect roughly a 150 point decrease in your credit score by settling a debt. If your credit score is 650 or lower, you should still expect your credit score to go down, but not as dramatically.

How Do Creditors Report Debt Settlement?

Creditors report debt settlement to credit bureaus or credit agencies. As a result, the settled debt will show on your credit report as Settled or Paid Settled. FICO released hypothetical scenarios addressing situations where individuals with different credit scores settled their debt. They are below

Scenario #1: 680 Credit Score

If you have a credit score of 680, you will lose roughly 45-60 points on your credit score by entering into a debt settlement. This assumes you have roughly 40-50% credit utilization, eight years of credit history, and no accounts in collections. These assumptions are simply meant to simulate an “average situation”.

Scenario #2: 780 Credit Score

If you have a credit score of 780, under the FICO hypothetical, you will lose roughly 140-160 points on your credit score by entering into debt settlement. Again, the assumption being you have similar credit history and activity as the person above with a 680 score.

Predicting How Debt Settlement Affects Your FICO Score

You can purchase your FICO score at myFICO.com and when you do, you can use the FICO simulator tool on their website; however, if you’re considering filing bankruptcy we recommend you focus on your financial health and less on your credit score. Your credit score will bounce back—in the meantime, bankruptcy or debt settlement can help you immediately restore financial peace in your life. Lastly, when you make a deposit with our firm to file bankruptcy, we purchase your credit reports for you.

Speak With A Debt Settlement Attorney Today

If you’d like to discuss debt settlement, you can reach us at 704.749.7747. The consultation is free and we can also answer any bankruptcy-related questions you might have. Making a phone call is the next step you can take toward financial freedom. We’re here to help. You can also request a FREE CASE EVALUATION and we will reach out to you.

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Filing Bankruptcy While Married

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Filing Bankruptcy While Married

If you’re considering filing bankruptcy while married, you’re not alone. Thousands of married couples are in your situation, and the bankruptcy filing statistics are easily found online, showing you that you’re not alone. The good news is one spouse can file bankruptcy without affecting the credit of the non-filing spouse. This article contains an examination of a few scenarios where you may want to file bankruptcy while married—even if your spouse isn’t filing with you.

One Spouse’s Debt Can Cause Anxiety In A Relationship

If one spouse brings debt to marriage, despite best intentions, the other spouse may feel resentful of the pre-marriage debt. At the very least, as a couple, you deserve a ‘fresh start’ together and that includes being free of debt you did not decide to incur together.

Computing The Means Test In Bankruptcy

If you’re filing bankruptcy while married, you will need to disclose the income of both spouses. This is done for the purpose of passing The Means Test in bankruptcy. The reason is that the federal bankruptcy code uses household income as the starting point for determining whether you qualify for bankruptcy. If you live with your spouse, you’ll need to count their income. The good news is most couples still qualify even when counting the income of their spouse.

Lastly, there is an option to take a Marital Deduction on The Means Test. This option allows you to more accurately show the court the amount of the household income which is being used by the non-filing spouse. Ultimately, this deduction reduces your income for The Means Test. The deduction is easy to calculate and your bankruptcy attorney will walk you through it.

Protecting Your Spouse’s Credit In Bankruptcy

Your spouse’s credit will not suffer due to your bankruptcy. Your bankruptcy will not show on their credit report, nor will it come up when applying for credit of any kind. When one spouse files for bankruptcy, the bankruptcy only affects the debts of the spouse who is filing. In other words, the marriage does not change the effect of bankruptcy from a credit standpoint.

Protecting Your Spouse’s Assets In Bankruptcy

None of your spouse’s own assets will be affected by your bankruptcy. If you have joint assets such as a house or a jointly owned vehicle, those assets can typically be protected in bankruptcy. The good news is only half of their value is counted for your bankruptcy filing when married. Lastly, if your spouse has a 401k or savings account in their name only, those assets are not part of the bankruptcy filing.

Joint Debt In Bankruptcy

If you have joint debt with your spouse, you may want to consider filing together. However, it is still perfectly fine to file without your spouse. One thing to consider is the obligation on a joint debt. Most marital debt obligations are “joint and several” liability. This means that both spouses are obligated for the full balance of the debt. If one spouse file bankruptcy, that spouse will no longer be responsible for the debt; however, the non-filing spouse will still be responsible for the entire balance of the joint debt. If the non-filing spouse decides to file at a later date, that would of course eliminate their obligation on the debt.

Your non-filing spouse may choose to attempt Debt Settlement instead of filing bankruptcy. This is a common way to successfully address a small amount of joint debt or debt that belongs only to the non-filing spouse.

Vehicles In Bankruptcy When My Spouse Isn’t Filing

The only vehicles which must be disclosed as assets are those vehicles that are titled in the name of the individual who is filing. If you transferred title to a vehicle from one spouse to another within four years of filing bankruptcy, that transfer should be disclosed in your bankruptcy filing. The transfer most likely will not negatively affect your bankruptcy filing, but disclosing it is in alignment with the court’s requirements for full disclosure of all transfers to family members and “insiders” (family and friends) within a four-year period preceding your bankruptcy filing.

Further Reading

You can read hundreds of articles like this one on our Bankruptcy Blog.

Speak With A Bankruptcy Lawyer Today

If you’d like to set up a free consultation about filing bankruptcy while married, you can call us at 704.749.7747 or click to request a FREE CASE EVALUATION and we will reach out to you. We know you have choices, and we hope you choose to Recover With Us.

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How Does Bankruptcy Affect You?

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How Does Bankruptcy Affect You?

While this question is general, we understand the concern. Most clients want to understand what it will be like during their bankruptcy, right after their bankruptcy, and a few years down the road from bankruptcy. This article is meant to address the question “How does bankruptcy affect you?” and we hope it helps. You can also read more specifically about how quickly you can file bankruptcy, or about Chapter 7 or Chapter 13.

How Are Things Right Now?

It’s important to put things into perspective when wondering how bankruptcy will affect you. It’s worthwhile to take stock of some of the experiences you’re having currently. They may include:

Creditors Pursuing You

No Savings For Emergencies

Inability To Save For The Future

Feeling Like You’re Failing Financially

Stress And Anxiety

All of these are very real concerns. Filing bankruptcy helps every single one of these concerns, from the moment you decide to file.

What Happens When I File Bankruptcy?

Creditor Calls Stop—Creditors are no longer allowed to contact you or pursue the debt, in accordance with The Automatic Stay in bankruptcy. You get this protection from the day your bankruptcy lawyer files your case. We have addressed Credit Cards In Bankruptcy in a prior article.

Savings Increases—You immediately stop paying creditors with your hard-earned income, and can use those funds to make sure rent or mortgage is paid. You can make your car payments on time. Or, if there is extra money left over, you can put it aside for savings.

You Feel Financially Healthy—With all of your unsecured debt gone, the immediate effect of bankruptcy is to free you from the burden of having overwhelming debt that you can’t keep up with over time.

Stress Melts Away—It’s amazing how stressful financial situations are. Without aggressive creditors calling you and reminding you every day that you owe them money, you’re free to focus on what’s important to you. The household budget is suddenly ‘balanced’ and you can afford necessities.

Credit Score—Immediately after filing bankruptcy, your credit score will drop due to the filing. Unless your credit was perfect before filing, you’ll find this dip in your credit score is a small price to pay for all of the benefits you receive upon filing bankruptcy. You can read more about your Credit Score In Bankruptcy as well.

How Does Bankruptcy Affect You One Year After Bankruptcy?

Credit Score—About a year after filing bankruptcy, your credit score will recover to where it was just before filing. From there, you can continue to rebuild your credit quickly.

You’ll Receive Credit Card Offers—While most clients swear off credit cards upon filing bankruptcy, receiving offers for credit cards a year after filing bankruptcy is a sign of healthy credit. It means if you do decide to buy a car or need credit, it’s available for you. The reason for this is when you file bankruptcy you eliminate a lot of debt. From a creditor’s standpoint, you become a great candidate for extending credit. Creditors also know you can’t file bankruptcy again for roughly eight years, so they count on you paying your monthly credit card bill if they offer you a credit card.

You’ll Have Opportunities To Save—With high monthly payments to creditors out of the way, you will find that each month you can set aside some money. This may be for savings, a future vacation, or some other necessity life brings your way. The peace of mind that comes with having some savings is priceless.

How Does Bankruptcy Affect You A Few Years After Bankruptcy?

Your Credit Score Fully Recovers—While bankruptcy may stay on your credit report for about 8 years, it doesn’t mean your credit score can’t recover much sooner than that. By making on-time payments on mortgage, car, or other debt, you’ll accrue a good credit rating over time.

You Can Buy A House—Two years after filing bankruptcy, you’ll become eligible for some federal loan programs for purchasing a home. Four years after filing, you’ll become eligible for most private funding available on the marketplace from lenders like Quicken, Wells Fargo, or other mainstream mortgage providers.

You’ll Know You Made The Right Choice—With all of the financial options in front of you, and with all of your debt behind you, your decision to file bankruptcy will reveal itself as one of the best decisions you’ve made for yourself and your family.

Further Reading

How Does Bankruptcy Affect My Spouse?

Click to read over 100 Bankruptcy Blog Articles.

Speak With A Bankruptcy Lawyer Today

If you would like to get some questions answered, or take the next steps toward a painless bankruptcy filing, call us at 704.749.7747. You can also click for a FREE CASE EVALUATION and we’ll reach out to you. We know you have choices. We hope you choose to Recover With Us.

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