debt

Good News! U.S. Credit Scores Have Never Been Higher – But Debt Is Climbing Too

Rachel — Thu, 01 Jun 2017 08:52:13 +0000

Good News! U.S. Credit Scores Have Never Been Higher – But Debt Is Climbing Too Rachel Thu, 06/01/2017 - 04:52

Credit score rising, but so is debt
Image Source: Flickr User Investment Zen

The Wall Street Journal (WSJ) recently shared the good news that this spring, U.S. credit scores reached their highest levels since FICO started tracking scores (which began back in 2005). The average American’s credit score is now 700. That’s impressive on the scale of 300 to 850 used by Fair Isaac Corporation. It’s not perfect credit by any means, but it’s good enough to get a consumer into a decent car loan, mortgage, and credit card deals with favorable interest rates.

Credit Scores Are On the Uptick All Around

A FICO score of 700 ranks as “good,” which is defined as roughly 670-739 points. Even those consumers that don’t average 700 are sitting better than they were a few years ago. WSJ also reported that the percent of consumers with fair credit has dropped. The range for “fair” is 580-669. As of the most recent report, just 20% of Americans have fair credit compared with 25.5% in that range back in 2010. Scores from 300-579 are considered “very poor.”

The Great Recession Made Us More Careful About Debt

After the recession tore family finances apart in the late 2000s, many people are now gun shy about racking up debt. Not only that, but Americans have been saving more of their money. Personal savings now average 5.3% from recent surveys, which is far and above savings statistics from pre-recession numbers. Consumer default rates on debt are also much lower than in recent years which means people are handling their debt load more responsibly. These are all good signs.

Other Debt on the Rise, Cause for Concern?

Although average credit scores are higher and delinquency rates lower, there are other concerning statistics. Student loans and credit card debt are both on the rise, both no exceeding $1 trillion. U.S. News reports that the average American’s debt profile is starkly different from a decade ago with student and auto loans plus credit cards taking precedence over mortgage debt as many struggle to step into home ownership. Household debt at its peak in 2008 was $50 billion less than it stands today at $12.7 trillion.

Consumer Confidence Up, but Debt Mitigates Spending

Despite consumer confidence in the economy, Nasdaq retail analyst Josh Elman is concerned. Elman told U.S. News that the average consumer “isn’t spending as robustly as everyone had hoped for, especially given the strong employment situation” and added, “recently, I’ve started to think about whether the consumer’s too stretched.” By this, he means that despite the healthy job market, people might be too tapped out by existing debt to spend which can slow consumer and economic growth.

Caution: Credit Card Delinquency on the Rise

While debt delinquency overall is lower than it has been in years, credit card delinquency is on the rise which might indicate consumers have overspent and are now struggling to pay the piper. But the flip side of the booming credit market is that if you’re rebuilding your credit after a bankruptcy, this could be a perfect time to get into new credit card accounts while the market is wide open. However, the key to using credit cards to improve your credit is to use them sparingly and pay off in full each month.

A Healthy Economy Is a Good Time to Re-establish Credit

If you’ve just come out of a bankruptcy or are considering bankruptcy to shed debt you can no longer manage, now might be a very good time for you to get out from under debt and kick-start a new and improved credit score. The sooner you get rid of your old debt and get a clean financial slate, the faster you can be on the road to financial recovery and a credit score rebound. Federal Reserve research shows that those that choose bankruptcy see higher credit scores sooner than those that muddle on in debt.

To find out more about improving your credit score after bankruptcy, contact Credit Score Keys. We help North Carolina consumers coming out of bankruptcy to regain their financial footing and re-establish their credit. Call 919-495-2365 today for a free consultation.

Resources:

US News

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How Does Medical Debt Affect Your Credit Score?

Rachel — Thu, 27 Apr 2017 09:32:30 +0000

How Does Medical Debt Affect Your Credit Score? Rachel Thu, 04/27/2017 - 05:32

Medical debt can tank your credit score
Image Source: Flickr User Claus Rebler

Medical debt is unique among other types of debt because of the complications of the insurance intermediary. This is also debt you generally don’t get into voluntarily unlike a mortgage, car loan, or credit card bill. Medical debt is a plague on the uninsured and insured alike thanks to changes in coverage that now require hefty deductibles and co-insurance for many consumers. Despite advances like the Affordable Care Act, medical debt continues to be a burden and, yes, it can lower your credit score.

How Medical Bills Drag Your Credit Score Down

Unlike a standard credit card bill or car payment that are reported monthly on your credit report, medical bills don’t automatically report. Medical practitioners don’t report patients that are a few days or weeks behind on a bill. However, once a bill has been outstanding for a few months, the medical provider will generally hand it over to a debt collector and they will report the delinquent debt to one (or all) of the three U.S. credit agencies – TransUnion, Equifax, and Experian.

What If Your Insurance Owes the Bill?

Even if your insurance provider owes the bill, that doesn’t mean they will pay up promptly. The bottom line is when you accept treatment, you sign an agreement saying you are responsible for the cost of the procedure, treatment, etc. There is usually fine print that says the provider will file the insurance claim but that comes with the caveat that the debt is still yours. That means you can be tangling with your insurance company who is delaying payment and the debt winds up on your credit score, dragging it down.

How Many People Have Unpaid Medical Debt?

According to ConsumerFinance gov, nearly one-third of consumers have debt in “collections,” meaning it’s past due and is being actively pursued by a debt collection agency or collection arm of the original creditor. Of all debt in collections, more than half of it is medical debt. That equates to nearly 20% of consumers or more than 73 million Americans who are seeing damage to their credit score because of medical debt in a delinquent and collections status.

Can You Remove Medical Debt From Your Credit Report?

If you have a medical bill that’s reported for debt collections, it can turn into a nightmare. It’s doubly frustrating when you don’t owe the medical bill yet it winds up on your credit report. Once the debt goes into the collections stage, even if you or your insurance firm pays it, the collection entry will stay on your credit report for seven years or more from the date the bill went delinquent. The collection agency doesn’t have to remove it even if you pay the debt, so you may be stuck.

Even If You Pay, Medical Debt Can Ravage Your Credit Report

The same report by ConsumerFinance showed that even if customers disputed an inaccurate delinquent medical debt account or paid it in full, creditors and collection agencies often fail to update the credit report to show that there is no balance owed. Credit card companies, mortgage lenders, and auto finance companies update accounts monthly, but those that don’t report regularly, such as collectors for medical debt, utilities, and cellular accounts, are more lax and can leave damaging info on your credit.

New Credit Score Models Will Change Things (Maybe)

Fair Isaac Corporation (FICO) has downgraded the weight of medical debt in its latest calculation, FICO 9, because they’ve undertaken studies that indicate overdue medical debt is not an accurate predictor of overall credit worthiness. However, many lenders don’t enroll in the latest score calculation subscription so this might not help you. VantageScore is also updating their latest score towards trending data which will put less emphasis on medical debt but, again, new models take a while to take hold.

Bankruptcy Can Help With Medical Debt

Because medical debt is unsecured debt, it can be wiped out totally with Chapter 7 bankruptcy and with Chapter 13 bankruptcy, unsecured debt is usually greatly diminished. For consumers mired in medical debt that insurance doesn’t cover, bankruptcy may be the answer. Many medical bankruptcies are triggered by a serious accident or illness (such as cancer) that skyrockets expenses while simultaneously decreasing income. Once recovered, the debt left over can be crippling. Bankruptcy can help.

After bankruptcy, when your medical debt is cleared up, along with other obligations, it’s time to focus on rebuilding your credit. That’s where Credit Score Keys comes in – and we’re ready to help you today. Call 919-495-2365.

Resources:

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Three Changes to the Latest VantageScore That May Help You

Rachel — Thu, 30 Mar 2017 07:21:32 +0000

Three Changes to the Latest VantageScore That May Help You Rachel Thu, 03/30/2017 - 03:21

When you think of your credit score, you most likely think about your FICO (Fair Isaac Corporation) score, but that’s not the only calculation out there. VantageScore is another big player in the credit score game. VantageScore Solutions just announced the release of their fourth-generation score, and it’s a game changer for many consumers.
Credit Karma and other services use VantageScore, and it’s a growing competitor for FICO that many lenders and creditors are increasingly using. If you’re applying for credit and have some negative items, you might get a better outcome from a lender or creditor that uses VantageScore 4.0 than a FICO calculation product. Here’s why.

#1 VantageScore 4 Puts Less Weight on Medical Collections

Medical debt can knock a considerable amount of points off your credit score. If you have medical debt collections on your credit report, it can hurt you even if it’s a bill owed by your insurance company but they’re dragging their feet on paying. Medical debt collectors don’t care if it’s your insurer’s responsibility and if it’s legitimate debt, it can hurt your score.

The new VantageScore doesn’t take into account medical debt that are 180 days and less since those can reasonably attributed to insurer delay. Some other negative items including some public records, will also weigh less on your score under VantageScore 4.0. This means that some tax liens and civil debts may not hit you as hard if your creditor is using this calculation instead of FICO.

#2 Artificial Intelligence Can Help Those with Little Credit

If you don’t have a lot of credit, you have what’s known as a “thin file.” This can happen for young people just getting into their first jobs and first credit. It can also help those who are restarting with their credit after bankruptcy or an extended period of credit inactivity. It sounds strange that AI (artificial intelligence) would play into this but it’s not sci-fi, it’s a tangible application.

VantageScore’s new AI modeling can offer a significant lift to thin files. This is a new arena for AI and credit scores and this new model may or may not take hold with creditors. A VantageScore Solutions rep says that using AI and “the most recent, cutting-edge model development and data techniques available” can expand borrower opportunities.

#3 Today’s Data vs. Trending Data

The FICO score is largely based on static data meaning it’s data from right now, a week ago, or a month ago. One example is credit utilization, which looks at the amount of credit card debt you have versus your total credit lines. If you pay for a car repair just before your credit card statement closes, you could have a high utilization and your score drops.

Then, a couple of weeks later, when you pay off your debt in full, your utilization is smaller and your credit score rebounds. You did nothing wrong, yet your score dropped, then raised. Trending data used in the latest Vantage Score looks at your credit habits over time rather than in just one moment, one week or one month. This helps creditors better assess your risk.

How to Benefit from the New VantageScore

Although it’s sometimes slow for lenders and creditors to adopt new credit score models, it’s still best to be aware how to take advantage of this new calculation when it does come online and begins adoption later in 2017.

Pay Your Credit Cards in Full

Because trending data better differentiates between those that occasionally have higher utilization and those that have occasional higher balances, you should try and pay off your cards in full every month. Those that carry balances are more likely to default according to these models, so paying off will give you a higher score predictably.

Stay on Top of Medical Bills

Because this new model only looks at medical bills older than six months, it’s imperative that you follow up aggressively with your insurance company to ensure they issue timely payments to your medical providers. Don’t sit back and hope they do right. Call and bother them until they pay so your credit score doesn’t take a hit.

If you’re just finishing up bankruptcy or have had your discharge for a few months, it’s time to get serious about improving your credit. Contact Credit Score Keys to find out more about rebuilding credit after bankruptcy.

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Changes to FICO Credit Score Calculation Can Benefit Those Dealing with Medical Debt

Rachel — Thu, 18 Aug 2016 07:04:26 +0000

Changes to FICO Credit Score Calculation Can Benefit Those Dealing with Medical Debt Rachel Thu, 08/18/2016 - 03:04

FICO score changes may impact the effect of your medical debt on your credit
Image Source: Flickr CC User Jay Gorman

The purpose of a credit score is to help potential creditors and lenders assess whether you’re a good risk for a loan, credit card, or other debt. Your credit score should reflect your financial behavior. But when it comes to medical bills, your FICO score sometimes puts you in a worse light than you deserve. Fortunately, new credit score models may change some aspects of your financial track record – including medical debt.

New Scores Will Reduce the Impact of Medical Bills

Before the new FICO scoring models were developed, all bills weighed similarly on your credit report. Leaving a credit card bill unpaid could affect you in the same way that an unpaid doctor bill would – but medical debt is often not an accurate assessment of your financial behavior. Even those with health insurance (a greater percentage now thanks to the Affordable Care Act) can still be stuck with unmanageable out-of-pocket costs through no fault of their own. In fact, roughly 20% of US workers (those out of school and pre-retirement) have medical debt they cannot afford to pay.
And some cases, medical bills may linger because the consumer is working with their physician or insurance company to get a billing issue corrected for an expense that insurance should have covered. In other cases, the medical provider might not send their statement to the patient in a timely manner – or the insurer could mishandle the bill. Under the old FICO scoring model, all this would have negatively impacted your credit score.

How FICO 9 Calculations Change the Weight of Medical Bills

The FICO 9 score lessens the impact of medical debts in collection on your credit score. You may not realize this, but when one of your debts goes bad and your creditor turns it over for debt collection, this event triggers a second entry on your credit score. You may end up with two entries for a single debt – one from the creditor and one from the debt collection agency. In some cases, that means the effect on your credit score can be doubled.
But with FICO 9, medical debt collections will carry lesser weight. If medical bills are your only negative items, you may see a credit score increase of 25 points or more from nothing more than this change in the calculation. However, it’s important to know that not every creditor or lender will use this new scoring model. The FICO score is a subscription service, and creditors can subscribe to whichever version of the score they prefer.

Who Will Be Affected by the New Scoring Model?

Veterans, in particular, may be harder hit by medical bills if they rely on the VA for their medical care. If the VA is slow about processing a service payment for medical treatment for a veteran, the veteran may end up with a collections agency pursuing them for debts the VA should have paid. That doesn’t seem fair, but it’s the harsh reality. But with this new scoring model, the effect of the VA’s late payment habits would not affect a veteran’s credit score as much.
Do you have medical bills you can’t pay? If you’re overwhelmed with doctors' bills and can’t dig your way out, Chapter 7 bankruptcy offers the chance to have all your medical bills completely discharged within weeks of filing. This can be life changing. Then, after you file bankruptcy and clear your financial slate, you can get a fresh start by working to improve your credit score.

To find out more about rebuilding credit after bankruptcy, contact Credit Score Keys today. We help North Carolina consumers bounce back after bankruptcy and get the credit they deserve. Call 919-495-2365 today for a free consultation about improving your credit score after bankruptcy.

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6 Ways Good Credit Saves You Money and Makes Your Life Better

Rachel — Thu, 11 Aug 2016 07:51:41 +0000

6 Ways Good Credit Saves You Money and Makes Your Life Better Rachel Thu, 08/11/2016 - 03:51

Good credit saves you money
Image Source: Flickr CC User 401(K) 2012

If you have poor credit because you struggle to pay your bills and are deep in debt – or you've just come out of bankruptcy – you should work on improving it. Why? Bad credit can cost you both money and opportunities, so taking purposeful steps towards improving your FICO score makes sense. Here are six ways that good credit can save you money and improve your life.

#1 Lower Utility Costs

Some utility companies require a credit check before they will offer services. If your credit score is low, you may be required to put down a substantial deposit, whereas potential customers with good credit may not be asked for a deposit at all.
You may even be refused service because of poor credit for optional services such as cable TV or internet. And for utilities that have varying rates – such as natural gas – it's possible that you'll have to pay more if you have a lower credit score.

#2 Better Banking Options

In the past, the only required precursor to opening a bank account was a Chex Systems verification – this was done just to ensure you didn’t have a history of bouncing checks or other negative banking activity. But many banks now require credit checks.
With good credit, you can often get no or low-cost accounts and services while those with lower scores may have to pay monthly fees for services and have access to fewer privileges. And if you can’t get a bank account at all, you may be stuck using costly check cashing services every time you get paid.

#3 Lower Insurance Rates

Auto, home and renter’s insurance providers may require a credit check before offering you coverage (in addition to requiring other info, such as your driving record). Insurance companies believe that those with higher credit are a lower risk for filing claims.
You can be turned down for insurance if you have a lower FICO score – or be charged higher rates for coverage. On the flip side, with a higher credit score, you can usually have your pick of insurance providers and enjoy much more competitive rates.

#4 Lower Borrowing Rates

When it comes to loans for a home or auto purchase, your credit score is critical. Those with lower scores may not be able to obtain financing at all. If they can, it will be at sub-prime rates. "Sub-prime" indicates that the borrower's credit score is lower than preferable – it's not an option you want to be offered.
But with a higher credit score, you can usually have your pick of lenders and much lower interest rate financing, both of which can save you big money over the long term. This is when higher credit scores can make a huge difference to your personal bottom line.

#5 Access to Rental Property

If you choose to rent rather than buy – or you aren’t ready for a mortgage – you'll find that most landlords now require a credit check as well as references and income verification before they'll offer you the lease for an apartment or home.
With poorer credit, a landlord may request a higher security deposit, higher rent, or may refuse to rent to you altogether. In short, a low credit score can significantly limit your housing options.

#6 Improved Job Opportunities

Depending on your career field, a credit check may be required for you to get a new job or a promotion. If you work for the government or are in the military, for example, your credit score can help you get and maintain a security clearance.
If you already have a low credit score, filing bankruptcy to ditch your debts can be one of the fastest ways to protect your credit and your security clearance, helping you find – or keep – a job.

To find out more about rebuilding your credit score after bankruptcy, contact Credit Score Keys today. We help North Carolina consumers rebuild their credit after bankruptcy and can help you too.

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3 Simple Steps to Improve Your Credit Score – How to Keep Your FICO Climbing After Bankruptcy

Rachel — Thu, 21 Jul 2016 07:30:28 +0000

3 Simple Steps to Improve Your Credit Score – How to Keep Your FICO Climbing After Bankruptcy Rachel Thu, 07/21/2016 - 03:30

Credit cards can help your credit score
Image Source: Flickr CC User Ed Ivanushkin

Many consumers don’t truly understand how credit scores are calculated and are surprised that their scores don't improve despite their best attempts. That’s because the FICO calculation is complex and involves factors that North Carolina consumers might not be aware of. Here are three simple steps that can help improve your score.

#1 Pay Down Credit Card Debt – Then Keep it Low

Credit card utilization is an important factor in your credit score. You need credit cards and a mix of other credit lines and debt to keep your credit score on the rise. After bankruptcy, some NC consumers don’t want to end up in credit card trouble again and may try to avoid them altogether. That’s admirable, but without credit cards, your score will never be as high as it could be.

Instead, having credit cards and learning to use them with restraint and discipline is key. First, you should never have more than 30 per cent of your credit line consumed when your credit card statement closes each month – but even that amount can lower your score depending on your income, credit score range and other factors.

The safest approach is to use your credit cards each month, then pay off the balances in full. To do that, don’t use your plastic for things you don’t need. Use your cards to fill your gas tank, buy groceries and pay bills since that’s money you'd need to spend anyway – then turn around and pay off the card in full on your payday just as you would use the money to pay those bills. That way, you’re using your card without amassing debt.

#2 Work Toward Credit Limit Increases

Having higher lines of credit can increase your credit score, as can using only a small percentage of them. If you must carry some credit card debt, having high limits means that the debt represents a smaller percentage of your total line of credit.
For instance, if you’re stuck with $2000 of debt you’re trying to pay down on a total credit line of $5000, that’s 40 per cent utilization. That’s high and can lower your score. But if your credit lines are bumped to $10,000, four grand is just 20 per cent utilization. With a $20,000 credit lines, that $2000 is just 10 per cent utilization. That’s even better.
So how do you get your credit lines increased? Simple. Use your cards often. Pay off your balances. Never make a late payment. Never make a payment lower than the minimum. Sometimes credit limits are raised automatically to reward good customers, and sometimes you have to ask. Don’t be afraid to ask for a credit line increase – the worst the card issuer will say is no. If you’ve been making on-time payments and using your cards, make the call to all of your card issuers to ask for increased limits. In some cases, you can request a credit line hike via their website.

#3 Set up Alerts for Your Credit Reports and Card Statements

Keeping inaccurate info off of your credit reports and protecting yourself from fraud and reporting errors is important, especially since it can be much harder to clean up mistakes, errors, or identity theft the longer it goes on. By signing up for credit score and credit activity alerts, you’ll know right away if something changes on your credit score.

Careful monitoring will let you know if your credit score is increasing or decreasing, which is important. But it also lets you know when new accounts or credit cards are opened. If you didn’t open them, you can get them shut down ASAP so that fraudulent activity doesn’t ruin the credit score you’re working hard to improve.

Use text alerts on your credit cards as well. By setting these up, you’ll know instantly if someone has stolen your card (or card info) and is using it for unauthorized activity. You can also set alerts to let you know if you’re getting close to your card limit, or to notify you about payment due dates so you never run late on a bill.

To find out more about improving your credit score after bankruptcy, contact Credit Score Keys. We help North Carolina consumers get their credit scores back on track after you get debt relief from Chapter 7 or Chapter 13 bankruptcy. Call 919-495-2365 to learn more today.

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Need a Car and a Job? Uber Is Offering Both to Responsible Drivers with Credit Problems

master — Thu, 22 Jan 2015 15:21:01 +0000

Need a Car and a Job? Uber Is Offering Both to Responsible Drivers with Credit Problems master Thu, 01/22/2015 - 10:21

If you are out of work, aren't earning as much money as you need and also have auto issues, that can be a problem. But now, there's an option available to those who need to earn money and need a new car – even for those with bad credit. Car and employment problems can often go hand in hand and produce a vicious cycle – you can't afford a car without a good job and you can't get a good job because you don't have a car. Breaking out of this cycle can mean a real change in your life, but how to make it happen? Taxi alternative company Uber is helping people in this circumstance get car loans. Here's how.

Have you heard of Uber? Essentially, people sign up to be drivers with Uber. Consumers who wish to use the service download the app which lets them see if there are drivers nearby and ping one to come pick them up for a ride. If you take a ride in an Uber car, you typically get an affordable ride in a clean car and pay through the app so no cash changes hands which reduces the risk of theft. It's a great idea that's shaking up the transportation industry.
But Uber (and other similar outfits like Lyft) has faced growth challenges because they don't have enough drivers. To combat this, Uber created a program for those who need a car but have poor credit – and are willing to work to get the vehicle they need. They enlist partner drivers and help them get a new car that they can pay for by working as an Uber driver. Uber partnered with GM and Toyota who are providing the cars and financial institutions who are making loans to new Uber drivers.
Uber is not co-signing the car loans, but is essentially vouching for the drivers to facilitate the loan. They can also fast-track the loan so that new drivers can get their new vehicle within a day or two – much faster than someone with poor credit can usually get a car. There has been some criticism that the loans made to Uber drivers are sub-prime, but if you have poor credit, it's usually inevitable that you'll pay a higher interest rate to obtain financing.
There is also criticism that taking a car through an Uber financing deal makes you an indentured servant. However, you can always walk away from the Uber driving deal and still keep your car so long as you continue to make your payments. On the flip side, even if you only work evenings and weekends driving for Uber, you may be able to use that income to pay your car payment and still work a regular job.
Many Uber drivers also have a day job and only work in off hours. Naturally this deal isn't for everyone – you have to have a clean driving record, be a good driver, like to work with people and be open to having strangers in your car. Most major cities and metro areas have Uber service and, in North Carolina, they include Asheville, Fayetteville, Piedmont Triad and Wilmington in their service areas. You can click here to find out more about driving for Uber.

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How Can You Make Sure All Your Debts Are Included in Your Bankruptcy?

master — Sun, 18 Jan 2015 15:04:35 +0000

How Can You Make Sure All Your Debts Are Included in Your Bankruptcy? master Sun, 01/18/2015 - 10:04

The whole premise behind bankruptcy is to get you a fresh start. But if your bankruptcy petition isn't complete and doesn't include all debts, you may not get the most complete debt relief. It's important to list every single creditor when you complete your bankruptcy papers, but how can you make sure you catch them all? There are a couple of different ways to identify them and a reputable bankruptcy attorney will help you with this.

For now, here's what to do to assemble a complete debt picture to bring to your bankruptcy consultation:

#1 Pull your credit reports
The first place to go to construct a complete list of all your debts and creditors is to your credit reports. Don't just pull one but pull all three credit reports from Experian, Equifax and TransUnion. Just one won't do. Why? Not all creditors report to all three agencies. Big lenders will report to all, but smaller or independent lenders may only report to one or two. Getting either a consolidated report that includes all three or three individual reports will give you the most complete picture. Bring this report to your initial consultation with you. Get annual free copies of your credit reports by clicking here.

#2 Go through your mail
Your credit report isn't enough because not all debts will show up there. The next step is to go through your mail. Dig out older mail and check out current mail as well. Look for bills, collection letters, lawsuit notices and any communication from anyone you know. Cross check these against items on your credit report. Any that aren't showing up on your credit report should be added to your stack of papers to bring when you see your attorney. Utilities and other bills that aren't on your credit report should also be included so your attorney can include these and use to calculate your expenses.

#3 Search the county register
You also want to make sure any past or pending creditor lawsuits against you are reflected in your bankruptcy petition. For pending cases, you can search the North Carolina Court System website. Click here to access it. This will show future court dates but not past. If you find any suits against you, print the basic information and take it to your bankruptcy consultation with you. To find out about past suits that have had a verdict, call your county courthouse. Click here for a directory of courthouse numbers.

#4 Go through your wallet and house
Next, go through your wallet and look at all your credit cards including major credit cards, store cards and any other cards that let you you borrow. Cross check all your cards against your credit reports. Any that aren't included should be noted so you can tell your attorney about them. Walk through your house and think about anything you have that you're paying for with credit such as rental appliances, furniture you borrowed to buy, etc. Write down anything you owe on that's not on your credit report so you can discuss these with your attorney at your bankruptcy consultation.

#5 Check your health insurance record
Unpaid medical bills are a major source of debt for many consumers considering bankruptcy. Click here for a recent article we wrote on this. If you have health insurance, you should be able to go onto your insurance provider's website and see a history of your medical activity. If you look for your Explanation of Benefits activity, you should see items your insurance didn't cover and that you have to personally pay. These are also items to search your mail for to make sure you include them all. Medical bills are 100% dischargeable in bankruptcy, so you definitely want to include all unpaid balances.
If you are filing Chapter 7 and have no nonexempt assets that the Trustee can distribute to your creditors, it doesn't matter so much if your petition is incomplete – all your unsecured debts will be discharged anyway. But you definitely should make sure you list your secured creditors no matter what – this is any debt tied to an asset like your home mortgage or car loan. If you do have any assets, it is much more important that your list of creditors is complete.

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Bankruptcy Basics: The Importance of Providing a Complete List of Creditors

master — Wed, 05 Nov 2014 14:03:28 +0000

Bankruptcy Basics: The Importance of Providing a Complete List of Creditors master Wed, 11/05/2014 - 09:03

If you're deep in debt enough to consider bankruptcy as an option, you likely owe money to a whole roster of creditors. What we see in our offices is that when our clients come in to discuss filing bankruptcy, they have a list of pressing debts that they are concerned about – credit cards, car loan, mortgage – but they really don't know exactly who all they owe money to. For some, they may not want to think about how extensive the list is of those they owe and for others, they simply don't remember who all they owe.

Why you want to ensure your creditor list is complete
It's important that the list of creditors is accurate and complete for a number of reasons:

First, you'll get the most complete relief by including all your creditors. If a creditor is not included in your petition, there's a chance that they can seek recourse later.
Second, you're not allowed to leave creditors off. If you have a credit card that's not maxed out and is current, you may want to hold it back, but that's not allowed. You don't want to be accused of inaccuracy on your bankruptcy petition that could cause your payment plan to be turned down (in a Chapter 13 bankruptcy) or your discharge to be disallowed (in a Chapter 7 bankruptcy).
Third, having the most complete picture of your debt circumstances allows your bankruptcy attorney to get you the best results. By knowing exactly what your income versus debts are allows our attorneys to advise you whether you're best served by a Chapter 7 or Chapter 13 and to ensure that the means test (the standard you must pass to secure a Chapter 7) is accurate and complete.

How you can make sure your creditor list is complete
Prior to coming in for your bankruptcy consultation, pull a free credit report to bring in with you. Also, collect up your last month of mail and sort through it for bills in case some of your past due debt isn't on your credit report. Finally, sit down and think about your bills and see if there are any debts you can think of that aren't on your credit report or in the stack of mail. This can include personal loans, furniture rentals (or rent to own arrangements), title pawns, payday loans and other “off the books” financial arrangements.
Bring all this information along when you come in for your free consultation, along with your most recent tax returns and pay stubs. This will allow us to give you the best advice and tell you which options you're eligible for and which will give you the most complete debt relief. Don't be worried about being embarrassed by what you owe, whom you owe or what the debt was for – we've seen it all and can serve you best with accurate information. There's no judgments in this process – we're here to help you.
Remember, any creditor you fail to list in your bankruptcy petition won't be discharged and can come after you at any point. If you leave off a major debt, this can ruin your financial fresh start and you don't want that. And, worse than your repayment plan not being approved or your petition being dismissed, you can be accused of bankruptcy fraud for leaving off debts and creditors. In short, your bankruptcy petition needs to be both accurate and complete.

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NBA Baller Antoine Walker Talks Bankruptcy and Financial Ruin in New Documentary

master — Tue, 21 Oct 2014 14:41:59 +0000

NBA Baller Antoine Walker Talks Bankruptcy and Financial Ruin in New Documentary master Tue, 10/21/2014 - 10:41

We like to cover celebrity bankruptcy here to show how no matter what you earn, the same money problems can get the better of anyone. Today we take a look at retired NBA power forward Antoine Walker who filed bankruptcy, pulled himself through it and is now encouraging other professional athletes in financial literacy to avoid the financial troubles he's endured.

As part of his efforts to encourage money smarts among athletes, Walker participated in making a documentary that will come out next year titled Gone in an Instant. This film chronicles how he made, spent and lost mega, mega bucks while playing 12 seasons in the NBA from 1996-2008 and how this has impacted his life. Walker filed for Chapter 7 bankruptcy back in 2010 and says he's out of debt, but it has cost him in many ways.
Out of the $112 million he earned in 13 years with the NBA, here's what some of it went to:

♦ $55 million in taxes ate up 49% of his earnings

♦ $11 million was spent on homes

♦ $9.5 million went on business deals

♦ $9 million went to support his family

♦ $8.5 million went to an entourage of hangers-on

♦ $4.2 million to attorneys and agents

♦ $4 million was lost to gambling

♦ $3.75 million went to relationships (mostly Evelyn Lozada)

♦ $2.5 million went to charity (not a lot all things considered)

Walker says, “I wanted to be one of the ones to step in front of my story and tell of how I ended up losing my wealth and make it a positive thing. I think sometimes everybody looks at it as a negative thing, but I want to make it a positive thing and one, let people know how I lost my wealth, but also educate the new guys coming into the league and make sure they don’t make the mistakes that I made.”

He has talked in the documentary and in interviews about one critical and very personal thing his financial troubles have cost him – the loss of the love of his life – Evelyn Lozada. She was a star on reality show Basketball Wives when they were engaged but when he went broke, she headed for the door and hooked up with NFL pro Chad Ochocinco (aka Chad Johnson). After she divorced him, she wed MLB star Carl Crawford. (On a side note, if Lozada marries a hockey player and NASCAR driver, she'll be a pentathlete in the athlete relationships department.)
The real estate crisis and the recession hit hard because he had some investments in real estate and the loans were called in – he says that caused his downward spiral. He also says one of the issues is the lavish lifestyle he enjoyed and that it costs a lot to maintain that lifestyle. Walker says he blames himself and said it's tough to play sports and make investment decisions because you can't stay on top of things.
We look forward to seeing the documentary next year and hope it will be informative for those that are struggling with their money. What we see looking at Antoine Walker's tale is similar to what we see with many clients in our office, just on a smaller scale. Walker isn't working in a high-earning field like he was before – this happens to many people.
He took a hit when the real estate market tumbled – many of our clients saw their equity disappear and found out they were now upside down on their mortgages. Walker also cites the recession with causing troubles and we see that a lot with our clients – this manifests itself with job losses, increases in debt and loss of value of assets. It's reassuring to know that even big celebs can go through the same financial aches and pangs the rest of us do.
If you're struggling to pay your bills and your income isn't what it used to be, Chapter 7 bankruptcy can give you a financial fresh start. If your earnings are okay, but you've fallen behind on your debts and need some breathing room to get caught up, a Chapter 13 can help. Contact the law offices of John T Orcutt for a free consultation on getting slam dunk help with your debt!

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