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Rebuilding Your Credit After Bankruptcy

Sometimes, bankruptcy is sometimes set off by one unfortunate or tragic event; some consumers simply cannot curb overspending. Filing bankruptcy solves only part of the problem, and there is an urgent need for the continuing assistance of a knowledgeable attorney who can provide solutions to financial problems.

Filing for a Chapter 13 bankruptcy puts you on a schedule to pay off and then discharge your debts, while stopping all repossession, foreclosure, or creditor harassment. Attorney Lawrence L. Szabo assists people in Oakland, Alameda County and contra Costa County with Chapter 13 bankruptcies -- visit our main Chapter 13 page to learn more or contact us for a free consultation. If you would like more information about Chapter 13, read the following.

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A Chapter 13 bankruptcy can put you on a debt repayment plan, after which your debts will be wiped clean. Attorney Lawrence L. Szabo can use more than 25 years of experience to analyze your case and determine whether a Chapter 13 will work for you. Contact us for a free consultation.

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The people of Oakland, Alameda County, and Contra Costa County deserve strong and experienced help with Chapter 13 bankruptcies. At The Law Office of Lawrence L. Szabo, we offer free initial consultations -- contact us any time.

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Rebuilding Your Credit After Bankruptcy

Bankruptcy has a long-lasting impact on a person's credit rating and on his or her ability to obtain credit in the future. The impact is not entirely negative. In some cases, filing bankruptcy may actually improve a bad credit rating. In addition, there are a number of steps a person can take to improve his or her credit after bankruptcy. An experienced bankruptcy attorney at Lawrence L. Szabo in Oakland, CA, can offer valuable advice about how credit can be improved after a bankruptcy, and how to work for a better financial future.

Discharge results in an improved debt-to-income ratio

Most of the debtors who consider filing bankruptcy already have poor credit histories. Their credit ratings have suffered because of slow payments, late payments, repossessions, extended credit, charge-offs, foreclosures or judgments. After their bankruptcy, however, the discharged debts will no longer count against their income, so their credit may be better after the discharge than it was before. In addition, while a bankruptcy case will remain on an individual's credit report for up to ten years; late payments stay on for up to seven years, so the effects are similar. Bankruptcy, however, gives consumers a chance to improve their credit faster because they will have an improved debt-to-income ratio after discharge.

Using credit cards wisely

In some cases, individuals may be able to keep one of their credit cards even after bankruptcy. They may retain a card that they already have but that has no debt on it, or they may reaffirm a debt on a card, which means that they sign a contract with the credit card company after filing bankruptcy that says the debt will be paid anyway if the holder is allowed to keep the card. Some companies are willing to agree to this arrangement because they will be paid for the debt, whereas without reaffirming the entire debt could be discharged in the bankruptcy proceeding.

A secured credit card is another option for rebuilding credit after a bankruptcy. A secured credit card is issued by a bank and backed up by money that is kept on deposit with the bank that issued the card. The bank account is the security for the card. If the bill for the credit card is not paid on time, the bank may use the money in the account to cover the payment. The limit on the card can be increased by increasing the balance in the linked bank account. The issuers of secured credit cards report about their customers to the credit bureaus, just like the issuers of other credit cards, so any subsequent positive payment history will be available to future creditors. The interest rates for secured credit cards are often higher than the rates for non-secured cards, but they still can be worth the extra cost by virtue of the redeeming value of the new and reported financial stability.

Co-signed loans

Still another way to re-establish credit after a bankruptcy is to obtain a loan with a co-signor whose positive credit convinces the bank or other lender that the loan is a safe bet. As payments are made on the cosigned loan, the positive credit history affects both borrowers.

"Credit-repair" services

One "credit repair" method to avoid after bankruptcy is seeking help from an unscrupulous "credit-repair service." Many consumers pay substantial sums of money to so-called "credit clinics" to "fix" their credit reports when, in actuality, only time can improve bad credit. A credit repair service or clinic can legally do nothing that a consumer cannot do on his or her own, for free. Some credit-repair companies actually encourage consumers to commit fraud by attempting to create a second identity. The Federal Trade Commission has investigated these often-fraudulent services and warns consumers to be wary of promises that seem shady or too good to be true.

Speak to a bankruptcy lawyer

In order to make the most of a bad situation, debtors must learn from bankruptcy and demonstrate greater financial responsibility in the future. A lawyer experienced in bankruptcy law at Lawrence L. Szabo in Oakland,CA, is in a strong position to advise consumers not only before and during the bankruptcy process, but also after, guiding them through the necessary steps to improve their credit ratings and avoid future financial catastrophes.

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DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

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LLS | The Law Office of Lawrence L. Szabo

Lawrence L. Szabo
3608 Grand Ave. STE 1
Oakland, California 94610
Phone- 510-922-0565
Fax- 510-834-9220