You can rebuild credit a consumer needs to re-enter the world of credit and add new, positive information to damaged credit reports.
If you reaffirmed a debt in your bankruptcy such as a car loan, you have already taken the first step.
One of the easiest and least expensive ways to add a new line of credit to a credit report is to be added to a loved one’s existing credit card account as an authorized user. They must have good credit and pay on time to help you.
You can apply for and open a secured credit card account. They are also very easy to open, even with a recent bankruptcy.
Credit builder loans are extended by credit unions. Like secured cards, it is typically easy to qualify for credit builder loans even for consumers with severely damaged credit reports and scores. The loans, which are often for small amounts, are reported to the credit bureaus as a positive account as long as payments are being made. They accomplish two things, which are to get something good on your credit reports and to build a small nest egg for emergencies. Check with your local credit union to see if they offer credit builder loans.
Apply for a retail store credit card. Retail store cards are typically issued with very low credit limits and very high-interest rates, which makes them a perfect lending product for consumers with poor credit scores.
Get a joint credit card or loan or with a co-signer. Your joint applicant must have good credit.
Typically, a Chapter 13 plan lasts from between 36 months to 60 months. The length of the plan depends on several factors: the amount of your average monthly gross income calculated over the six month period prior to the month of filing, the monthly amount of your disposable income, the amount and kind of debt that you have, and the value of your nonexempt property. If the historical average monthly gross income is over the state median you will be forced into a 60 month plan, unless you can pay 100% of your unsecured debt within a shorter period of time.
Chapter 13 bankruptcy debtors who do not claim the homestead exemption may instead choose the “wildcard” exemption” under Florida Statute section 222.25(4) even if they protect their home through the use of the Chapter 13 bankruptcy process.
If you fail to pay your credit cards, medical bills, have a foreclosure, or car repossession they can sue you for the balance owed. This will normally result in a judgment against you. Judgments are then recorded with the Clerk of Court in the county in which they were an issue.
What you need to know.
How long is the judgment good for?
Lien of Judgment under FSA §55.081 is good for 20 years.
Actions on non-recorded judgments under FSA §95.11(2)(a) are good for 5 years.
Mechanic Lien judgments under FSA §95.11(5)(b) are good for 1 year.
Judgments of Foreclosure where a deficiency is reserved on must have the action on the deficiency filed within 1 year from the foreclosure judgment. FSA §95.11(2)(c)
Many judgments can be re-recorded for an additional 10 years.
The Judgment will appear on your credit report.
Once a judgment is filed against you it will show under public records on your credit report. This is information that is pulled by the credit bureaus through various services. The majority of unsatisfied judgments will sit on your credit report for 7-10 years from the date the judgment is filed by the court. This will have a major derogatory impact on your credit score.
If the judgment is re-recorded before the 7 year period runs, it can appear for an additional 7-10 years on your credit report from the new recording date.
If you pay a judgment you will receive a notice of Satisfaction from the lender. You need to record this with the Clerk of Court. Some lenders will record these, but many will not. Once the Satisfaction is recorded with the Clerk of Court the next time the credit bureaus pull your public records they will be notified of the update. You can also send a letter of dispute on your credit report with a copy of the recorded satisfaction. This will not result in the removal of the judgment from your credit report, but you can have it noted in consumer comments.
Vacated judgments can be removed from your credit report. Send a copy of the order Vacating the judgment to the credit bureau.
Some mortgage lenders will require judgments to be paid off in order to close on a mortgage depending on your credit.
Credit reports contain inaccurate or missing information about 1/4 of the time. You should check your credit report for each agency on a yearly and follow up on anything that needs to be disputed. You can pull a free credit report here: https://www.annualcreditreport.com/index.action It is best to only pull one report every 4 months so you have a constant snapshot, unless you find an error.
Judgments and Bankruptcy
The underlying debt if disclosed to your attorney, or on your credit report, will be included in your bankruptcy. This means you will no longer be liable under the judgment once your bankruptcy is discharged. However, this does not remove the judgment lien. Additional action, which incurs additional attorney fees in needed.
This action is a Motion To Avoid A Judicial Lien, the typical charge is $400.00 and it is filed during your bankruptcy case. The Order is then filed and recorded in your State Court Action, thereby releasing the lien. These judgments can then be removed from your credit report.
Above means income debtors are required to use Form B-22C (Chapter 13 Calculation of Your Disposable Income which is part of a 2 part test) which effective December 1, 2015, will be Form B122C-2. Unlike trustee fees, there is no deduction for attorney fees being paid in the plan on the form. §1325(b)(1)(B) provides that a Chapter 13 plan should “provide that all of the debtor’s projected disposable income … will be applied to make payments to unsecured creditors under the plan.” 11 U.S.C. § 1325(b)(1)(B).
Section 1325(b)(1)(B) of the Bankruptcy Code provides in pertinent part that, if a trustee or an unsecured creditor objects to confirmation of a debtor’s Chapter 13 plan, the plan can be confirmed by the court only if it provides to pay the creditors in full or proposes that “all of the debtor’s projected disposable income … will be applied to make payments to unsecured creditors under the plan.” 11 U.S.C. § 1325(b)(1)(B). Section 1325(b)(2) then defines “disposable income” as current monthly income received by the debtor less amounts “reasonably necessary to be expended.” See 11 U.S.C. § 1325(b)(1)(B).
Trustees across the country have been using this provision to object to Chapter 13 Plan fees for Debtor’s attorneys through the plan. In re Hemker, No. 15-90023, 2015 WL 5262080 (Bankr. C.D. Ill. Sept. 8, 2015), the trustee argued that the amount shown from the B22C form must only go to general unsecured creditors, excluding any attorneys fees to be paid in the plan. Further, Debtors’ attorney fees are excluded from the calculation under 11 U.S.C. § 707(b)(2)(A)(ii)(III), and thus the Debtors should not be allowed to use their disposable income to pay their attorney fees. The Trustee based this argument on Ransom. The Court rejected this argument as making an unfair treatment between a below income debtor, who was allowed to pay attorney fees through the plan and an above income debtor who could not. A debtor’s attorney who has not taken a security interest in the debtor’s property is an unsecured creditor who may be paid from disposable income.
Apparently, this case is part of a nationwide trend to make bankruptcy filings more difficult for the Debtor and their counsel. On October 6, 2015, the American Bar Institute held a Webinar “BAPCPA at 10”. Attorney Caralyce M. Lassner of Acclaim Legal Services PLLC, Warren, Mich., one of the panelists, said in practice BAPCPA has been like using a backhoe to fix a crack in your sidewalk. Lassner stated how impossible it is to confirm a chapter 13 Plan without major concessions from the debtors or creditors. She also cited two cases in the Eastern District of Michigan which attacked Debtor’s attorney fees.
Professor Lois R. Lupica of the University of Maine School of Law said empirical studies have found no evidence of widespread abuse among consumer debtors. In fact, Lupica said that under BAPCPA the cost of access to the bankruptcy system has increased significantly, which is keeping the poorest debtors from being able to file.
In the Middle District of Florida the Chapter 13 Trustees have interpreted Harris that when a chapter 13 is dismissed or converted, the check for the balance paid in less their fees, goes to debtor c/o attorney for refund, however, no attorney fees or adequate protection is paid after dismissal/conversion by the trustee. The attorney must then try and get the debtor to pay the balance of their fees due under the retainer agreement. ( If the Debtor refiles bankruptcy within a year- would the trustee treat our fees as a preference? )
It’s that time of the year you dread. Lucky it only comes once a year! Doing your taxes can be overwhelming, but it is a necessary evil. Even if you are going to owe money and can’t pay, make sure you file your taxes on time without an extension. Most taxes that are filed on time without an extension and are over 3 years old are dischargeable in your bankruptcy, failing to file on time no could affect you in the future.
Here are five tips for organizing your self for tax season:
Know what can be deducted. For Example: Deduct cash, property and stock donations made to a charity. Make sure you have receipts. You can deduct mileage and vehicle expenses for a charitable purpose. You can deduct your medical expenses including mileage for doctors. You can deduct business expenses.
Get proper documentation. Doctors, pharmacies, child care providers will all provide you a print out of what you spent with them the prior year if you ask. For any single contribution to a charity over $250, you must have a written acknowledgment from the charitable organization. For property valued at more than $5,000, you must have a qualified appraisal.
Keep limitations in mind. Your cash gifts are generally deductible up to 50 percent of your adjusted gross income. Noncash gifts, such as property or stock owned for more than one year, are generally deductible up to 30 percent. You can carry over any remaining deduction for up to five consecutive years.
Transfer records to personal budgeting software such as QuickBooks or Quicken. Enter the information from tax-related transactions electronically to stay organized. Doing so will also help you forecast your tax situation to help you gauge whether to give more to maximize tax benefits.
Involve the professionals. Hiring a CPA or accountant or tax attorney who is up to date on the tax laws to do your taxes is well worth the cost. Just remember you have to provide them the detailed information so they can get you your maximum deductions.
There is a scam auto dialer calling cell phones claiming to be the IRS. The voice mail message goes like this:
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I repeat this is a SCAMdo not call do not give your social security number or any personal information.