Rebuild Credit after Bankruptcy
Massachusetts Bankruptcy Firm Smeloff & Associates can help
BANKRUPTCY STOPS BAD CREDIT. THAT’S THE REAL DEAL.
I’m attorney Richard D. Smeloff and this is a no b.s. zone
If you’re reading this you probably don’t have the best credit. That’s why you’re here and I’ve got great news for you for a change. You are probably concerned that bankruptcy may hurt your credit score or worse prevent you from obtaining credit in the future. NOTHING COULD BE FURTHER FROM THE TRUTH.
But don’t just take it from me. There are advertisements all over, you have seen them, actually looking for people who have filed for bankruptcy to sell them a car, home or furniture. Why? Because after you have competed your bankruptcy, now you are a better credit risk. You have no debt. Lenders look at your debt to income ratio to determine loan eligibility. Well now you have no past due bills to spring out of the woodwork to bite you like a snake.
Lenders look at current pending delinquent or late payments on your credit report to judge you. But now your credit report has been wiped clean of all the negative information. Only the mortgage payment or car payment you make going forward is reported. You credit score recovers remarkably fast. The truth is most of my clients’ scores rocket up a hundred points in the first year after bankruptcy.
Remember, the Bankruptcy Laws are federal laws. Your Congress and Senate are responsible for passing and creating these laws and amendments. Why do bankruptcy laws exist? To protect you. To give you a fresh start. Wipe your credit report clean and rebuild your credit score so that you can finance that new car or mortgage in the future. In fact many of my clients start getting new credit card offers in the mail within months.
We have filed thousands of bankruptcy cases and often hear from our
prior clients thanking us and get calls from their friends or relatives seeking our assistance as well. In fact many of our new clients are referred by prior clients. In over 18 years of practice I have never had a client tell me they regretted filing bankruptcy.
What If I Don’t File For Bankruptcy?
Well I’m the eternal optimist. My job is to give my clients a legal leg up. A boost to get them out of a temporary set back and move on with their lives.
The reality of it is that I almost never in my daily practice see people that I would recommend against a bankruptcy filing. Why? First because there really is no long term downside to filing. There just isn’t. Second, short of paying the debt back, there is no better alternative. Look, this isn’t my special program. These are the laws of the United States.
What About Debt Consolidation Programs? Well these are private programs. No guarantees. These debt consolidation companies you see on TV have low level employees who try to negotiate your debt with the credit card companies. Good luck with that. The next problem is that forgiveness of debt outside bankruptcy is taxable as income. That’s right. You get a 1099 from the credit card companies at the end of the year. A big tax bill. You have to pay income tax on those monies.
And debt consolidation companies charge you huge, excessive fees. You could file 5 bankruptcies with the money they charge you. Further, whatever deal they work out for you invariably requires you to make payments for years. The same trap you are in now. And all the while your credit score doesn’t get any better until all the debts are paid years down the road. Don’t just take my word for it. The Massachusetts Attorney General’s Office has been investigating debt consolidation companies practices actively.
What if I’m Judgment Proof?
You might be. But it isn’t a good legal strategy. That’s like going into a boxing ring with Mike Tyson and taking the punches without fighting back, hoping he will get bored and go away….
Seriously, you could be “judgment proof” theoretically, but that won’t stop the bill collectors from summonsing you into court on supplementary process actions to testify as to your finances in front of a Judge. It won’t stop the harassing phone calls. It will not stop creditors from seizing your bank account or your personal property. And it won’t help rebuild your credit. It will not help your dignity.
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