Declaring bankruptcy may feel like a severe move but it can be the best way to get back on solid financial footing if you’re in dire straits.
Bankruptcy allows troubled consumers to eliminate crushing debt or establish long-term repayment plans, depending on the circumstances and type of petition filed. It can stop collection calls and may protect debtors from foreclosure.
While bankruptcy will damage your credit rating – information about the filing stays on a credit report for up to 10 years, according to the Federal Trade Commission – it needn’t place a permanent cloud over your financial life.
You can start working to re-establish good credit right away. In fact, median credit scores for those who file for personal bankruptcy protection steadily increase each year afterward, according to a U.S. Consumer Financial Protection Bureau report.
“The bankruptcy will haunt a filer for a while but it gives breathing room to reassess what when wrong and how to rebuild,” said Scott Cole, CFP, founder and president at Cole Financial Planning and Wealth Management in Birmingham, Ala.
Here are several measures that can help someone rebuild creditworthiness after declaring bankruptcy.
Check your credit report
Monitor your credit report for errors on a regular basis, as mistakes are common, according to Greg Plechner, CFP, partner at Greenspring Advisors, a corporate retirement and wealth management firm in New Jersey.
Federal law permits you to obtain a free credit report annually from each of the three major credit bureaus through AnnualCreditReport.com.
After your bankruptcy is finalized, Plechner said, confirm the bankruptcy filing date is correct and accounts discharged during the process are reported as discharged.
Explore credit card alternatives
Secured credit cards can help you build credit when you don’t qualify for a regular credit card. While you can make purchases with it as you would with a traditional card, you “secure” – or back the account – with a cash deposit.
“This helps protect the lender in the event you cannot make payments,” Plechner said.
Use the card reliably over time and you can re-establish your creditworthiness with the credit reporting agencies. A word of caution, however: fees and interest rates can be high on secured cards, Plechner said.
A credit-builder loan can help you both boost your credit score and build up cash as you make regular payments, including interest, to a locked savings account set up by the lender – often a credit union. The funds are yours once you’ve paid the loan over six to 24 months, according to the CFPB.
Retailer credit cards that you can use in your favorite stores offer another possible option if you don’t qualify for a regular unsecured credit card. The underwriting, or approval criteria, for store cards tend to be more liberal but the fees and interest rates can be high, Plechner said.
Get friend or family support
If you can’t get a loan or credit card on your own, a friend or family member with healthy credit might agree to co-sign for you, which can help your credit score. It can be a significant request, though.
“A co-signer is risking their credit to help you,” Plechner said.
“If it is problematic to ask someone to co-sign, you could instead ask to be an authorized user on a friend or family member’s personal credit card,” he added. “Be sure to verify that the credit card will report payment activity by authorized users to the credit bureaus.”
Practice good financial habits
Responsible financial behavior forms the building blocks for good credit.
“The secret to rebuilding your credit is basically the same as getting good credit in the first place. Pay your bills, on time, every time, all the time,” Cole said.
“That is the number one way. By doing this you are showing to creditors and potential lenders that you know that you have learned to handle the credit available to you.”DEBT SNOWBALL METHOD VS. DEBT AVALANCHE: WHAT’S THE DIFFERENCE?
That also means refraining from slipping into old bad habits and getting in over your head.
“Just stick with it. Don’t over-extend and make sure you can handle current obligations,” Cole said. “The longer and more consistent one is in doing that, the less risky you become to potential lenders and the higher one’s credit score will get. Be consistent, don’t over-utilize the available credit and pay the bills in a timely fashion.”
Plechner recommended paying more than the minimum on credit cards when you can and to be aware of two financial “dont’s.”
He warned consumers to avoid credit repair agencies, as there’s nothing a credit repair agency can do that you can’t do yourself.
He also recommended against using payday loans. “The effective interest rate is almost always unconscionable,” he said.
Experian, one of the credit reporting agencies, notes that student debt typically isn’t discharged in bankruptcies, and recommends making monthly payments on time to help rebuild your credit score.
Experian, like many financial experts, suggest making a budget to get a handle on your spending and keep debt in check.
“Bankruptcy can be an important, financial lifeline,” Cole said. “Don’t waste it.”
California’s vague new financial regulation law – Whittier Daily News
Assembly Bill 1864 didn’t get much media or public attention as it zipped through both houses of the Legislature on the last day of the 2020 session.
Superficially, it appeared merely to reconfigure the state’s financial regulatory agencies into a new entity called the Department of Financial Protection and Innovation.
However, those in California’s vast financial industry were paying lots of attention because the bill creates an entirely new regulatory regime with broad powers, including fines of up to $1 million a day, to police financial players that hitherto have had little oversight.
The official rationale for the legislation is that President Donald Trump’s administration neutered the federal Dodd-Frank Wall Street Consumer Financial Protection Act of 2010, so the state must step in with an equivalent to guard against predatory financial practices that harm consumers.
The new California Consumer Financial Protection Law gives the reconstituted agency authority to go after “abusive practices” whose definition in the law is fairly vague. Thus, the agency itself will define the term as it also decides which businesses will face its scrutiny.
It appears that the new law will affect firms involved in debt settlement, credit repair, check cashing, rent-to-own contracts, payday lending, student loan servicing and financing for retail sales. However, its primary target seems to be financial services offered by non-banks, particularly what are called “fintech companies” that offer bank-like services via the Internet without maintaining physical offices.
Fintechs, many of them based in the San Francisco Bay Area, have blossomed in recent years as part of the digital economy, competing with traditional brick-and-mortar banks. Their disruptive nature is not unlike the challenge that technology-based ride services such as Uber and Lyft pose to taxicabs and buses.
Late-blooming changes in AB 1864 exempted traditional financial firms that are already regulated, such as banks and credit unions, from the new consumer protection law, leading some analysts to conclude that its unstated aim is to help them stave off competition from new kids on the financial block.
The vagueness of the new law was encapsulated in what Gov. Gavin Newsom said during a signing ceremony. The new law and the new department, he said, will “create conditions for innovation to flourish in a way where we can steward that and we can just work against its excesses. So we support risk-taking, not recklessness.”
Newsom also signed two other financial protection measures, one that requires debt collectors to be licensed beginning in 2022 and the other creating a Student Loan Borrower Bill of Rights.
Although the new state law is said to mirror the Dodd-Frank law, it contains at least one significant difference. When federal regulators levy fines for what they consider to be bad conduct, the money goes into the federal treasury. When state regulators impose their fines of up to $1 million a day, the money will be retained by the new agency to finance more activity.
Will that give the new agency a financial incentive to skip over minor consumer issues and go after big companies? It’s a question that only time will answer.
Significantly too, the new investigative and regulatory mechanism contained in AB 1964 specifically does not usurp the authority of the attorney general to also target companies under the state’s equally vague “unfair competition” law.
From its inception a decade ago, Dodd-Frank has attracted criticism from business executives for regulatory overkill. Will California’s new version be less controversial? We won’t know until the new agency puts some definitional meat on its bones.
CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary
397 people register to vote on deadline day at Duval Supervisor of Elections – 104.5 WOKV
JACKSONVILLE, Fla. — Monday, Oct. 5 at midnight, is the deadline to register to vote in Duval County.
But the Supervisor of Elections helped hundreds of people get registered today.
Robert Phillips, the chief elections officer of the Duval Supervisor of Elections, told Action News Jax’s Courtney Cole that 397 people came down to the Supervisor of Elections in downtown Jacksonville to get registered.
Supervisor of Elections staff assembled tents outside to allow people to register to vote without having to go through the COVID-19 prescreening necessary to enter the building.
“Again, 2020 has thrown us some challenges,” Phillips said.
There was even a little rain thrown into the mix today, but it didn’t stop folks from coming out.
“Out here, we have a lot of activity. We’ve been going since first thing this morning,” Phillips told Action News Jax.
There were people of all ages from all walks of life — some even registered for the very first time like Lemark Jamison.
Monday, Oct. 5, is a day he will always remember.
“It feels awesome, you know? It feels awesome,” Jamison told Cole.
Today, Jamison had the opportunity to register to vote for the first time in Florida.
“I’ve worked for voter registration companies. I’ve done advocating for Amendment 4, but I was never able to vote because of my prior background. But now I can,” Jamison said.
Jamison, the owner of a tax and credit repair business, told Cole his prior felony conviction held him back in the past.
In November 2018, more than 60% of Floridians voted to restore voting rights to more than 1 million people who completed their sentences.
But several months later, legislation was passed that required them to pay all financial penalties, which means thousands lost the right as quickly as they gained it.
“I’ve been contributing to society. I’ve been able to have several businesses. And I pay taxes. But I haven’t been able to, when it comes to voting, whether in a local level or any type of legislature — I haven’t been able to vote,” Jamison said.
The 35-year-old told Cole even though his wife helped him fill out his voter registration form — to which he exclaimed, “Thank God for wives, right?” — he told Cole it was pretty easy.
Now, he has this advice to share with other people who may be in his shoes:
“Get out and vote. Take advantage of this opportunity, regardless of who you plan on voting for.”
Here’s a breakdown from the Supervisor of Elections of how the 397 people registered today:
-56% registered as Democrats.
-21% registered as Republicans.
-22% registered as nonparty affiliates.
Credit360 Now Providing Credit Repair Services in Orlando
One of the nation’s finest in personal and business credit solutions has expanded its services in Florida.
“We are very excited to now offer our life-changing services in Orlando,” said Andre Coakley, Founder & CEO of Credit360, a company with an elite team of credit experts that know exactly what techniques will assist individuals and businesses with increasing their credit scores to meet their goals. “We are here to help you achieve your optimal credit profile by making the credit repair process convenient, individualized, and effective.”
Credit360’s specialized credit repair processes, credit expertise, and guaranteed customer service, company representatives say, make it the best in the industry.
Coakley explained that Credit360 has had the opportunity to help thousands of Americans correct their credit reports. In fact, Credit360, Coakley stressed, is a company that puts its money where its mouth is and only charges a fee when items are deleted, removed, or repaired from individuals’ credit reports.
“With our services, you will no longer have to use other expensive credit repair companies that charge monthly and don’t even produce results,” Coakley promised, before adding, “We are so confident in our advanced disputing tactics that we will allow you to pay for your deletions after you actually see our results and we even give you a 100 percent money-back guarantee to back it up just so you can relax.”
Coakley went on to reiterate that Credit360 is an elite team of credit experts that know exactly what techniques will assist customers with increasing their credit scores to meet their goals.
“With our services, most of our clients see deletions within the first 45 days of enrollment and usually see an average increase of 93 points throughout their program cycle,” Coakley said.
About Credit 360
Credit360 was established to assist individuals in restoring their personal credit and in offering a complete line of business credit solutions. Credit360 is a financial services firm specializing in credit restoration and business consulting services.
10664 SW 186th Street
Miami, FL 33157
Source: Credit360 Credit Repair
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