Basic information about bankruptcy

While New York residents may run up debt in a number of different ways, including home, automobile and student loans, but credit card debt is still the most common reason people file for bankruptcy. According to a recent survey, nearly one-third of the respondents cited credit card debt as their reason for filing, with the next two most common reasons being home foreclosures and job losses. The survey also found that a large majority of consumers had filed for bankruptcy under Chapter 7 compared to Chapter 13. While people commonly filed for bankruptcy for various reasons, approximately 20 percent of the respondents were concerned about the impact on their credit rating. It is important to note that while a bankruptcy will put a mark on someone’s credit report, people are now able to start rebuilding their credit almost immediately after filing. With the increase in popularity of prepaid and secured credit cards, consumers can quickly begin developing a payment history that helps to boost their credit score. In some cases, many individuals are able to successfully obtain new credit within a few years of filing for bankruptcy. There are a variety of benefits to filing for bankruptcy, and it can… Continue reading

Why Chapter 13 can be frustrating for those seeking new credit

When New Yorkers take on debt to the point where making monthly payments becomes too overwhelming, they may file for Chapter 13 bankruptcy. This type of bankruptcy allows consumers to reduce credit card debt by making manageable payments over a five-year period. But when it comes to rebuilding credit, it can be a Catch-22. Consumers need to apply for new credit cards in order to rebuild credit, but at the same time, lenders are scared to extend credit to those who are going through bankruptcy. Although approval is possible early on in a Chapter 13 bankruptcy, sometimes the most useful tip is to wait it out. Debt eventually declines as consumers pay it off. This results in a higher FICO score, which makes consumers more attractive to lenders. This takes time, though. Approval for a new line of credit won’t happen overnight. There will be rejection, so it’s important to take everything in stride. For those who want to try securing credit right away, a secured credit card may be the way to go. A consumer puts down a certain amount of money — typically several hundred dollars — as collateral and this determines the card’s credit limit. So if… Continue reading

Get out of debt with a repayment plan with Chapter 13 bankruptcy

When you’re in a position where you’re facing a growing debt that threatens your life and livelihood, it’s normal to want to get out of the situation through any means necessary. Before you take any steps toward freedom from your debts, it’s important that you understand what you’re doing. Each choice you make now could affect you into the future, and you need to understand how your future will be changed. Chapter 13 bankruptcy is one of the few bankruptcy choices that allows you to restructure your debt, so you can keep the things you have. Part of the problem of having debt is the amount you have to pay each month. Did you know that choosing Chapter 13 bankruptcy can help you reduce your liability and provide you with an affordable monthly payment that is primarily based on your income? With Chapter 13 bankruptcy, there are a number of benefits you can appreciate. You may be able to consolidate high student loans, for instance, helping you reduce them and get a zero-interest repayment plan. You could eliminate credit card debt, and best of all, you could stop harassing phone calls to your home and cellphone. If you have tax… Continue reading

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  • New York State Bar Association
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