Articles Posted in Credit Cards

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choose-150x150Many times, I meet with potential clients who are in the process of weighing credit counseling v. bankruptcy in Jacksonville, Florida in hopes of achieving debt relief. These potential clients, who largely become clients, want to know what the main differences are between credit counseling and bankruptcy. I always stress the importance of my client’s goals as they try to decide which option is best for them. For some, bankruptcy is the last possible option they will consider. This is due to the bad stigma many people associate bankruptcy with, but this is why bankruptcy might make the most sense in the long run.

Credit Counseling

Let’s start with defining credit counseling. Credit counseling is when you work with an agency or company you have hired to help you come up with a plan to pay off your debt. However, you must be very careful when choosing a credit counseling agency as many charge high rates and do not actually help you pay off your debt as promised. I have many clients who have come to me after this specific experience. It is best to choose a not-for-profit agency. Continue reading →

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How to rebuild your credit score after bankruptcy is a question I get asked from just about all of my clients. It is one of the most important unanimous concerns clients seem to have going into bankruptcy and it should be. In fact, the toll filing bankruptcy can take on your credit score is probably one of the most common reasons why many people in Jacksonville, Florida look at bankruptcy as a very last resort and avoid it all costs. Unfortunately, most are falsely under the assumption they will not be able to use any credit for seven to ten years after filing bankruptcy. But this is not always the case. If you start taking steps to rebuild your credit score after your bankruptcy is concluded, you could have a great credit score in just one to two years.

Here are a few simple steps you can take to rebuild your credit score after bankruptcy quickly. Continue reading →

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I remember turning 18 and being so excited to get my first credit card. I was still a senior in high school, so I went to my favorite department store and applied for my very first credit card. To my surprise, I was approved right away! It seemed all too easy. Shouldn’t getting a credit card be a little more difficult to get?

When I got that credit card, I was so excited to purchase a Coach wallet (my first very own big purchase) and vowed to not use the card again until it was paid off. Of course, I fell into the same trap as many other 18-year-olds and did not stop there. I wanted another credit card and went to my second favorite store and filled out another credit card application.

When I arrived at college that fall, I was shocked to see credit card company after credit company with booths set up on campus. They offered ridiculous free items to get students to sign up, and, guess what, it worked! The booths were always busy with students filling out credit card applications. I don’t know what kept me from filling out one of those applications (maybe it was that I already had one or that it had been drilled into me by my family never to purchase what you cannot afford) I never did and am so thankful today I did not. Continue reading →

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marriage-150x150One thought that many people think about when getting married, is what their future spouse’s credit history is and their ability to obtain new debt. A correlating question is how will their future spouse’s credit history affect their own ability to obtain new debt. Why? Because they most likely, one day in the future, would like to know they have the option to purchase a new home, motor vehicle, or simply just obtain new debt. It can become much more concerning if your future spouse has filed bankruptcy within the last few years. How will their bankruptcy affect your ability to obtain new debt? Unfortunately, there are a lot of factors that can affect the answer to this question. So, regrettably, the answer is that it will depend.

Most importantly, it is crucial to make note that the fact alone that your future spouse filed bankruptcy, regardless of when, is absolutely immaterial to your individual credit report. Your credit report will not merge with your future spouse’s credit report simply because you got married. You both will maintain separate and apart credit reports. In other words, your individual credit report will remain the same as it was before getting married. However, by being married, your spouse may have to sign certain types of contracts. Continue reading →

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pastdue-150x150If you fall very far behind on your credit card payments, or any other kind of debt for that matter, your debt might appear as having been charged-off on your credit report. A charge-off occurs when you are at least 180 days behind on your credit card payments, and the bank decides that the debt is no longer collectible and decides to write it off as a loss. However, this does not mean you no longer owe the debt. You are still 100% responsible for the debt. But what do you do and what should you expect?

The debt will have to be repaid.

At first, you might think that it is a good thing that your debt has been charged-off and you might even think that you no longer owe the debt. Unfortunately, when your bank decides your account is uncollectible, that is simply an accounting term. It in no way affects your liability for the entire debt owed. However, there is one caveat. The bank can only collect on the debt until the statute of limitations expires. In Florida, the statute of limitations for a credit card debt is five years. Continue reading →

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tax-debt-forgivenessA civil judgment is obtained when you fail to pay a debt that you owe, such as a credit card debt, and the creditor/lender files a civil lawsuit against you in state court for a breach of contract. If you fail to respond to the lawsuit and/or do not have a valid defense, a civil judgment is entered against you. If it is a relatively small judgment amount and you do not have a lot of other debt, then it might be best to simply set up a payment plan to pay it off. However, if the judgment amount is large, is more than you can handle, or you have a lot of other debts, then you might want to consider bankruptcy in order to get a fresh start.

The good news is that bankruptcy will discharge the majority of civil judgments entered against you, but there are a few exceptions. It depends entirely on what the underlying debt was for and whether a lien has been placed on your real property. There are certain types of judgments that cannot be discharged with a bankruptcy.

The most common type of civil judgment is a judgment for unpaid debts, such as a credit card, medical bill, rent, repossession or personal loans, just to name a few. If your judgment is for a debt such as one of these, then it is most likely dischargeable through bankruptcy.

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The most common type of summons received after filing bankruptcy and obtaining a discharge is a foreclosure summons. When received, it can be very alarming. You filed bankruptcy, surrendered a home, and received a discharge. You moved out of the home and on with your life thinking you are no longer liable for the home. However, when you elected to surrender the home in your bankruptcy petition, this only took care of your financial responsibility regarding the home. The bankruptcy did nothing about the deed for the home being in your name. Therefore, the bank still has to foreclose on the property in order to get the property out of your name and to take legal possession of the property. When a foreclosure is purely to take legal possession of the home and not for any money damages, it is called an in rem foreclosure action. You do not have to answer the summons unless you believe you were incorrectly served or they are suing for money damages as well. The mortgage holder must serve you because you are an interested party due to your name being on the deed.

If the summons you received after bankruptcy is for a credit card or another kind of debt you believe was discharged in bankruptcy, then you need to respond to the summons stating that the subject debt was part of a bankruptcy. Before doing so, make sure the debt was properly listed on your bankruptcy schedules and it is a debt that can be discharged. If it was properly listed on your schedules and you received a discharge, then assert this in your response/answer to the summons. Once you show the debt was discharged, the action should be dismissed.

If you are unsure of what type of lawsuit you have been served with or whether the debt was properly included in your bankruptcy, you should consult with an experienced bankruptcy attorney. A simple review of the summons, accompanying complaint, and your bankruptcy petition by an attorney can help you determine what action, if any, you need to take. Contact the Law Office of David M. Goldman, PLLC by calling (904) 685-1200 to speak with an attorney today.

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risinggraphOne concern that seems to be unanimous for almost all those who are thinking about filing bankruptcy is when and/or will they be able to use their credit again. Each person’s ability to use their credit after filing bankruptcy depends on their unique situation, but the passing of time seems to be the one undisputed determining factor of when credit can be used again.


Credit After a Chapter 7 Bankruptcy

At first it will be hard to get credit, but it will not be impossible. It will be even harder to get credit with favorable terms since those with bad credit or no credit simply have to pay more in order to borrow money. This means higher annual fees and interest rates, but you will have majorly lowered your debt to income ratio and eliminated your ability to file another Chapter 7 Bankruptcy for the next 8 years. Both of which make you a more favorable borrower to creditors.

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Jacksonville Bankruptcy AttorneyMany Florida residents are under the impression that once they have filed for bankruptcy and their debts have been “discharged” they are no longer liable for those debts. This is not always the case as there are certain debts that cannot be discharged in bankruptcy. This is especially important for people to know before they begin the process of filing for bankruptcy.

Each chapter of the bankruptcy code specifies which debts are dischargeable and which are not. Section 523(a) of the Bankruptcy Code lists the types of debts that generally cannot be discharged in bankruptcy. This means that even after the debtor has prevailed in bankruptcy court, if the debts have not been discharged, then the debtor is still responsible for paying those debts. According to the Code, these non-dischargeable debts are exempt from discharge for reasons of public policy.

If a debt falls into one of the exempted categories in Section 523(a), then it is usually automatically removed from the discharge and the debtor remains obligated to pay those debts. Most commonly, those are child support and alimony debts, some tax debts, debts that the debtor failed to disclose to the court during the application process, most federal student loan debt, personal injury claims against the debtor for DUI-related incidents and personal injury claims against the debtor for willful or malicious damage to a person or to property.

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Jacksonville Bankruptcy AttorneyMany times, when someone wants to make a large purchase, like a house or a car, they may need to have someone co-sign the loan with them. Simply put, a co-signer is someone who is making a promise to the creditor to repay a loan if the primary borrower cannot pay and defaults on the loan. We all know that if the primary borrower defaults (or files bankruptcy), the co-signer will be required to pay the loan back in its entirety. But what happens when it’s the co-signer who has filed for bankruptcy? How will that affect the primary borrower?

The best way to describe the situation is with an example. Picture this: Charlie is in the market for a new car, but can only qualify for a loan if he has a co-signer. His friend David agrees to be a co-signer on the land, but he will not be listed on the title as the owner of the car. Sometime later, David files for bankruptcy and is no longer required to pay the car loan. What happens to Charlie?

Charle, as the primary borrower, still has to pay the balance of the loan. Now, when Charlie pays off the loan, there will be no liens on his car, and the car will be titled in his name as the owner. The only difference between being a primary borrower and a co-borrower in an auto finance contract is who the car eventually belongs to after the loan has been paid. Thus, when David, the co-borrower, filed for bankruptcy, that amounts to a breach of the loan agreement and it could be considered default. The creditor, however, now has only one person to look to for the repayment of the loan.

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