San Diego Bankruptcy Law Firm. 877-GOBK619

This blog is updated by San Diego Bankruptcy Law Firm. The blog is designed to educate consumers about their rights under the Bankruptcy Code.

Bankruptcy can STOP FORECLOSURE, ELIMINATE DEBT AND PROTECT YOUR ASSETS! Call us for a free consultation at 877-GOBK619 or 619-260-1800. Visit us at

We are a debt relief agency and help people file for Bankruptcy under the Bankruptcy Code.

Thursday, October 28, 2010

Rebuilding Your Credit after Bankruptcy

Here is a great article I found on MSN Money
Make sure to read it at:

Bounce back fast after bankruptcy

Carefully rebuild your credit, and you could qualify for almost normal rates, even a mortgage, in a year or two. Here's what you need to do.

By Liz Pulliam Weston
Almost anyone can get credit soon after a bankruptcy. It's just a matter of knowing how.

It's true that bankruptcy deals a devastating blow to your credit and your credit score, the three-digit number lenders use to gauge your creditworthiness. But the effects don't have to be lasting.

Long before the bankruptcy drops off your credit report, you could be qualifying for loans with good rates and terms.

Nothing is forever
Ken from Chicago filed Chapter 7 liquidation after unemployment and overspending caused him to rack up more than $20,000 in credit card and other unsecured debt. Four years later, his credit scores ranged from 655 to 719, decent numbers that are just below the cutoff to get most lenders' very best rates.

"I . . . applied for a secured credit card (usually reserved for people with troubled credit) and was informed that I qualified for an unsecured card -- a possibility I hadn't even considered," Ken said. "While I am going to be very careful with my new credit (card), I am heartened that creditors consider me an acceptable risk."If you're recently bankrupted, here are two things you need to keep in mind:

Nothing in credit is "forever." A bankruptcy legally can remain on your credit report for up to 10 years, but its effect on your credit score can start to diminish the day your case is closed -- if you adopt responsible credit habits such as paying your bills on time, using only a small portion of your available credit and not applying for too much credit at once.
You have to get and use credit to build your credit score. Living on a cash-only basis may be a smart choice for those who really can't handle credit. But if you want to rebuild your credit score, you can't sit on the sidelines.

Learn from your mistakes
Although repeat bankrupts show that getting credit after a Chapter 7 or 13 filing is possible, you shouldn't want to emulate those who file more than once.

At first glance, people who file more than one bankruptcy seem to be beating the system: They run up big bills and then walk away.

Video on MSN Money
Video: How's your credit?

Where to go to get free reports -- and how to interpret them when you've got one.Think about it a little more, though, and you'll see these multiple bankrupts are really defeating themselves. Their debts and credit history often mean they're paying out big bucks in high interest payments during the time when they're prohibited from filing another bankruptcy. (The 2005 bankruptcy law provides that, under Chapter 7, eight years must elapse before you can refile. If you go for Chapter 13 after a Chapter 7, you must wait four years. Going from one Chapter 13 to another, two years must elapse.)

And most people can't file for Chapter 7 liquidation if they have significant assets to protect, such as home equity or savings. So these folks who are repeatedly going broke often have little to show for all the money that's leaving their pockets. Instead of building wealth over time, they're losing ground.

Instead, use your bankruptcy as a wake-up call to figure out what's wrong with your finances and fix it.

If your problem was overspending, you'll find plenty of information on this site about creating and sticking to a budget (see "Your 5 minute guide to budgeting").
If you didn't have enough savings to survive a job loss or other setback, get serious about establishing an emergency fund.
If you were sunk by medical bills, seek a job with insurance coverage or check to see if your state offers coverage.

Clean up your credit report
One common problem people emerging from bankruptcy often face is that credit reports frequently show accounts as open and overdue -- when in fact they were closed and the obligations wiped out as part of the bankruptcy.

If you encounter this, you need to contact the credit bureaus and insist that those accounts be properly reported as "included in bankruptcy." It's the only way your credit can recover.

If you have other serious mistakes on your credit report, those need to be corrected as well. Your credit score is based on information in your credit report, so errors on your report can seriously dampen your score.

Get a secured credit card
You need two types of credit to quickly rebuild your credit score:

Installment: auto loans, student loans or mortgages
Revolving: credit cards or home equity lines of credit
Continued: Light credit card use builds credit

Most recent bankrupts have trouble qualifying for a regular, unsecured credit card. So the best solution usually is a secured card, which generally gives you a credit limit that's equal to an amount you deposit at the issuing bank.

Typically, that's $200 to $500, which may seem like a pittance compared with the credit limits you enjoyed before your bankruptcy. But don't make the mistake of using your available credit. Maxing out your credit cards hurts your credit score.

You don't want to charge more than 30% or so of your credit limit, and you want to pay the balance off in full each month. Light, regular use of a credit card is what helps build your credit.

And contrary to what you might have heard, you typically don't need to carry a balance or pay credit card interest to build your score, since the leading credit scoring formula doesn't distinguish between balances that are paid off and balances that are carried month to month. Get in the habit now of not charging more than you can pay off every month; your credit score and your finances will be the better for it.

You also shouldn't grab just any secured card. Look for the following:

No application fee and reasonable annual fee. Some secured cards tack huge upfront and annual charges onto their accounts; you don't need to pay these to build your credit.
Reports to the major credit bureaus. You're not doing your credit score any good unless your payment history is being reported to the three major bureaus: Equifax, Experian and TransUnion. Before you apply for a card, call and ask if the issuer regularly reports to all three.
Converts to an unsecured card after 12-18 months of on-time payments. Good behavior should get you upgraded to a regular credit card within a year or two.

Get an installment loan
If you still have student loans (which typically aren't dischargeable in bankruptcy), you can use them to rebuild your score. Make your payments on time, all the time, and try to pay more than you owe whenever possible. Next to making on-time payments, paying down your existing debt is one of the best ways to improve your credit score.

Ken of Chicago took this to heart, making double or triple the minimum payments required to retire his $23,500 student loan debt within three years of his bankruptcy filing.

"The fact that I had to repay my student loans (rather than having them discharged) might have helped me in the long run," he said.

It's unlikely in the current credit climate, but you may be able to qualify for a high-rate mortgage as little as six months after a bankruptcy. You're probably better off waiting until you can qualify for an FHA loan, though. You can typically get one just two years after your bankruptcy case has closed, as long as you've maintained good credit habits since then. FHA loans have interest rates that are usually only half a percentage point higher than regular mortgage rates.

Just make sure you really can afford a home before you buy one. Many people wind up in bankruptcy court because they stretched too far to buy a house and can't keep up with all the attendant costs of homeownership, said bankruptcy expert Elizabeth Warren of Harvard University. (See "Don't bite off too much house" for more details.)

Video on MSN Money
Video: How's your credit?

Where to go to get free reports -- and how to interpret them when you've got one.Auto loans can also help you rebuild your credit -- just be prepared to pay nose-bleeding rates at first.

"My first vehicle out of bankruptcy (had an interest rate of) 21%," said Chance Nelson of Indianapolis, who applied for the loan just a few months after his debts were discharged. "After paying this for about two years, I went and traded it in and purchased another (at) 13.99%."

Nelson refinanced this second loan a year later at 7.95%. Five years after his bankruptcy filing, Nelson was paying a reasonable 6% rate for his auto loan.

If you go this route, try to make a big down payment and choose a loan that doesn't have a prepayment penalty. That way, you can refinance the car to a lower interest rate as your credit improves.

Liz Pulliam Weston's latest book, "Easy Money: How to Simplify Your Finances and Get What You Want Out of Life," is now available. Columns by Weston, the Web's most-read personal-finance writer and winner of the 2007 Clarion Award for online journalism, appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.

Wednesday, October 27, 2010

How to Avoid Bankruptcy with Debt Settlement, Debt Negotiation or Debt Relief


Debt settlement, debt negotiation and debt relief all mean the same thing. It is a process by which the debtor negotiates an agreement to pay a portion of the debt owed in exchange for relief from the remainder of the debt. If a credit card company or other creditor agrees to a debt settlement the rest of the debt is eliminated forever, avoiding Bankruptcy.

Most consumers have tried to negotiate a settlement on their own but have failed. Choosing to retain the San Diego Bankruptcy Law Firm to negotiate your debt relief can help protect your rights and will generally result in a better offer from the credit companies who know that they will receive nothing if you file for Bankruptcy.

The San Diego Bankruptcy Law Firm can you help you avoid bankruptcy and attempt to negotiate a debt settlement on your behalf.
What is Debt Settlement, Debt Negotiation or Debt Relief?

Debt Settlement, Debt Negotiation and Debt Relief all refer to the same thing it is the process of negotiation with creditors by a professional agency or law firm which results in having to payback only a percentage of the debt you owe while wiping out the rest of your debt.

How does a Debt Negotiation program work?

The San Diego Bankruptcy Law Firm and its team of attorneys will negotiate with your creditors. Typically, if a creditor cannot collect on the debt, they write it off as a loss on their taxes; however they may still pursue a law suit to recover their money. Therefore, it is in their best interest to negotiate or settle the debt for a fraction of what you owe, rather than receive nothing. Working with the San Diego Bankruptcy Law Firm can help protect your rights and in the event that a lawsuit is threatened or filed, we can help you pursue Bankruptcy as a last resort. Creditors may reach agreements to settle debt in order to recover a portion of monies they often would not of have been able to collect.

Will Debt Relief affect my credit?

This depends on your current situation. Typically, you must stop making your payments so that the Credit Card Company will negotiate your debt. Your credit may be adversely affected due to non-payment of existing debt that you wish to settle. In the process of reaching an agreement with your creditors, many items can be negotiated such as removing negative remarks. This depends on the creditor. However, once your Credit Card Debt has been settled you can begin to rebuild your credit.

How Much does it Cost?

Every case is different and the cost will depend upon how much you owe and how much we are able to save you. Contact us today to see if you qualify for debt settlement. We can be reached 24 hours a day at 619-260-1800 or 877-GOBK619.

California Foreclosure Basics. How to Stop a Foreclosure

The Bankruptcy Attorneys at the San Diego Bankruptcy Law Firm are always looking for helpful information for individuals struggling with keeping their home. Here is some information on foreclosure from a great website:

For more information on stopping a foreclosure with a bunkruptcy please contact us at 877-GOBK619 or 619-260-1800 or visit our website at Speak to an attorney today, there is no charge for an initial consultation.

California Foreclosure Basics

Definition of Foreclosure

Foreclosure is a process, governed by California state law, by which a home is sold to satisfy an unpaid debt such as a home mortgage, a tax lien or other debt.

What Causes a Foreclosure

A foreclosure is initiated once a default occurs. A default can be triggered by a failure to make a payment on a deed of trust or mortgage, or, for example, can also happen if a property is sold without permission or if property taxes aren’t paid. The note and mortgage will stipulate what the lender considers a default.

California Foreclosure Process
The California foreclosure process typically takes about 200 days starting from the time that a homeowner misses their first payment to the point when the home is auctioned off in a foreclosure sale. Though this might seem like a lot of time, the four month process moves very quickly and a homeowner must act immediately in order to take advantage of as many options as possible to avoid foreclosure.

Foreclosures in California are typically non-judicial under power of sale in deed of trust. This means that the foreclosure process occurs without any court intervention, with requirements for the foreclosure process set by state statute. The lender will typically send a Notice of Intent to Accelerate after 60 days. Next, the lender will contact the homeowner 30 days before sending the first of two notices in the foreclosure process, a Notice of Default. The Notice of Default gives the homeowner a 90-day window until the lender takes the next step, which is a Notice of Sale, the second notice required by California law. The Notice of Sale then gives the homeowner 20 days before the foreclosure sale takes place.

A homeowner has a right to cure the default up to within 5 days before the sale. In a non-judicial foreclosure, commonplace in California, a lender is not able to seek a deficiency judgment*. (*A deficiency judgment allows a bank or lender to obtain a judgment lien against a homeowner when a foreclosure sale does not produce enough to cover the full amount due on a home loan.) Without a deficiency judgment a homeowner is not given a redemption period. What all this basically means is that not having a redemption period available after the foreclosure sale makes the foreclosure sale date the deadline for a California homeowner to rescue his home. (You can find more information pertaining to California foreclosure statutes, Cal. Civ. Code §§ 2924 to 2924l, on the California Legislative Information website, but the reading contains a lot of legalese, so be forewarned.)

However, after the foreclosure sale, a homeowner may still remain in the home for some time while the legal eviction process churns on. After a foreclosure sale happens, if the foreclosed homeowner has not moved out of the home, the lender/bank or new owner is required to produce a 3-Day Notice to Quit. Once the three days expire and a homeowner still has not moved, then the new owner is required to start the legal eviction process by filing an unlawful detainer, which basically means that the foreclosed homeowner has 30 days still before the sheriff will come out to force an eviction.

California Foreclosure Timeline
From the day that a homeowner first misses their mortgage payment, they have 200 days until a foreclosure sale, and 233 days total until a foreclosed homeowner is evicted.

Avoiding a Foreclosure in California
Delaying or stopping a foreclosure may be possible if the foreclosure was based on false information (for example, the lender substantially overstated the amount you had to pay to reinstate your mortgage, depriving you of your reinstatement rights under California law). Other reasons why you might be able to prevent a foreclosure include:

bringing a case to court that could delay or stop the foreclosure because
a loan origination didn’t abide by fair lending practices or other required mortgage regulations according to federal and California law,
failure by the foreclosing party to follow the requirements of a non-judicial foreclosure in California, for example, not properly serving the homeowner with a notice of default, or
the party attempting to foreclose is not legally entitled to do so,
you are able to short-sale the home, and
you are able to qualify for a loan workout or bankruptcy protection.
This list is not all inclusive, there are other options and reasons why you may be entitled to preventing a foreclosure. We encourage you to ultimately seek professional help since these situations can be mentally and emotionally taxing on a homeowner, not to mention extremely time-sensitive. Start by educating yourself through the foreclosure prevention resources available on this website to help you understand what it is exactly that you are facing in a foreclosure, and in the end that will help you to make better decisions with how you will save your home.

Next Step…
Make sure you understand the tax implications and what the results may be if you pursue a foreclosure defense strategy or solution.