Monthly Archives: May 2013

Getting Your Credit Back After Filing Bankruptcy in Indiana

Getting Your Credit Back After Filing Bankruptcy in Indiana

There is nothing to be ashamed of after you filing for bankruptcy and receiving a bankruptcy discharge. In fact, millions of consumers have experienced bankruptcy and have turned their lives and credit around. Famous people file for bankruptcy protection all the time. In fact, both Abraham Lincoln and Thomas Jefferson had financial troubles, and they rebounded. You can do as long as you take responsibility for your actions. Dealing with previous bad credit habits and establishing new responsible debt management habits just takes motivation and getting some good advice from an expert such as a bankruptcy attorney and/or credit advisor to get your financial house in order.

Re-establishing Credit After a Chapter 7 Bankruptcy Discharge

The good thing about a Chapter 7 bankruptcy discharge is it allows you a second chance to start over and learn from your previous credit mistakes. When you file for Chapter 7, you get the added benefit of eliminating your debts so you can start fresh. Creditors are more willing to provide you with new credit because they know you don’t have any more debts. After a few years of establishing good credit habits and paying your bills on time, your credit score will go up and eventually you will regain your good credit rating.

Re-establishing Credit After a Chapter 13 Bankruptcy Discharge

An Indiana bankruptcy court-approved Chapter 13 repayment plan between you and your creditors allows you to keep all your assets and pay off your negotiated reduced debt within a 3-5 year period. Once you have completed the plan, your remaining unsecured debts are also discharged by the bankruptcy court. This gives you the opportunity to start over as well by continuing on with good credit habits. You are also able to maintain your relationship with your old creditors.
Your new creditors recognize your efforts as well by extending you new credit. Keep in mind that your credit rating improves over time on its own, as long as you continue to practice responsible credit habits.

Here are a few tips to help improve your credit score right away after bankruptcy and help you restore your credit:

1) Apply for a secured credit card with a smaller limit. Secured cards are secured by a savings account established in your name for the same amount as your credit card limit. Your creditor reports your payment history to the three major credit bureaus, and you can rebuild your credit this way.

2) Avoid going over your credit limits. Always stay under your limits.

3) Pay cash for everyday items such as food, clothes and gas, and use your credit cards for emergencies. Getting in the habit of writing a check, using a debit card or paying cash will prevent you from spending money that you don’t have.

4) Always pay the full balance on your credit cards whenever possible or substantially more than the minimum payment so you don’t incur expensive finance charges. Making small minimum payments incurs high finance charges. The one that benefits is your credit card or finance company.

5) Pull a free copy of your annual credit report making sure there are no errors. If you find errors, write to the consumer credit bureaus asking them to remove the items. You would be surprised how many errors there are. It is also a good idea to periodically check your credit or purchase a credit card fraud alert protection plan for a nominal fee to prevent identity theft.

Obtain Legal and Financial Assistance

By following responsible credit habits, you will avoid the temptations to overspend and then have debt catch up with you later. Talking to an expert Indiana bankruptcy law attorney or credit advisor about your credit options is recommended. Learning from bad credit mistakes and taking the advice of legal and credit experts is a major step in the right direction in regaining your credit after bankruptcy.

The Eight Year Waiting Period is Over

The Eight Year Waiting Period is Over

Many consumers are confused about the 8 year waiting period requirement between bankruptcy filings. Under the Bankruptcy Abuse and Consumer Protection Act of 2005 (BAPCPA), the waiting periods for certain debtors who received a bankruptcy discharge has been changed to 8 years before a successive bankruptcy can be filed after their first bankruptcy discharge. The determining factor is the type of bankruptcy proceeding a consumer initially filed and whether the previous case was discharged or not. The 8 year rule primarily applies when you decide to file successive Chapter 7 filings. A Chapter 7 bankruptcy is a complete liquidation.

What You Need to Know About the 8 year Bankruptcy Waiting Period

Another important aspect about filing for bankruptcy in Indiana and the 8 year waiting period rule is that there is no minimum time period which prevents you from filing for bankruptcy protection. Keep in mind that the critical determining factor is whether your initial bankruptcy was discharged. The waiting rule clock starts ticking from the time your bankruptcy was discharged not filed. Therefore, if you file prior to the 8 year waiting period after your Chapter 7 bankruptcy discharge, you will not be able to receive a discharge on your second and subsequent bankruptcy.

There may be some benefits to filing for another bankruptcy in Indiana before the 8 year period expires such as creditor protection because creditors are stayed from collecting a debt against you once you file for bankruptcy protection. This may give you more time to negotiate with your creditor such as your bank if you are heading towards foreclosure or your car finance company if you are behind in your car payments. However, it won’t get your debts discharged.

If your bankruptcy was never formally discharged, you withdraw the petition or your first bankruptcy was denied, then you could file sooner. However, the debts from your first bankruptcy may not be included in current bankruptcy filing and discharge. If you originally filed under Chapter 7 and then you decided to file a successive and subsequent bankruptcy under Chapter 13, the rules get even more complicated.

Getting the Right Advice

To find out whether you must wait for the 8 year period to expire before filing for bankruptcy in Indiana, it is recommended that you consult with a Indiana bankruptcy law attorney and/or a credit advisor. An Indiana bankruptcy lawyer is the only person who can legally represent you and attend bankruptcy court hearings on your behalf. An experienced Indiana bankruptcy attorney will also negotiate with your creditors and advise you of alternative options to bankruptcy. You may also wish to seek credit counseling for a certified credit counselor to help you establish responsible credit habits and debt management.