The Credit Restoration Process varies in time length for each individual client. Acknowledge these key words “process” and “individual.” Synonyms for the word process are; procedure, progression, course of action or system. Synonyms for individual are; private, personal, special, or for one person.
Any individual that has more serious credit related issues such as a foreclosure, unpaid tax liens, civil judgments, bad debt charge-offs, multiple collection accounts or a previous bankruptcy may require more effort and time spent than another with only minor credit issues. Although consumers should have high expectations of our process, they should also retain some sense of realism. The process will take some time. Patience, individual fortitude and resilience are all considered to be required prerequisites of any of our potential clients.
One should not expect some “miraculous” event where every single negative item or personal liability owed gets wiped clean from the credit reports. The reality is that a bad credit rating or low credit score cannot somehow be “magically transformed” to a “sparkling clean” credit history over a matter of a couple days or weeks. In other words, there is no “magical wand” effect. It is a matter of getting professional help and resolving past issues in an acceptable and affordable manner.
New clients should allow a minimum period of three months for significant or desired results to be realized. Keep in mind, usually credit problems that are being addressed have taken several years to make. Some debts may need to be resolved through negotiation, mediation and/or settlement strategies which may extend the process. No one person’s credit issues or problems will be exactly the same as another. Every situation differs as does each and every person who comes to us for help.
If unresolved credit issues are currently preventing you from obtaining your needs, wants or desires, you may be at a “defining moment” or “turning point” in life. Those who start the process and follow it through to the end will experience a life changing event. For those who decide to do nothing, that same event may not come to pass. In simple terms, the options become; (1) Begin the journey forward for a better financial future and an improved quality of life, or (2) Stay idle and stagnated in the same situation. The decision is yours.
Bill collectors are legally allowed to contact you if there is a legitimate debt owed. But, they cannot continue to contact your place of employment if it jeopardizes your continued employment. Employers want personal issues of their employees to be left at home. This includes calls from bill collectors. Also, how would you pay the debt if you lost your employment? Personal issues concerning your financial problems should not interfere with the workplace environment.
If you are experiencing this dilemma, the best defense is a clear understanding of your rights under the Fair Debt Collection Practices Act – (FDCPA). Also, seek professional assistance so the calls stop. Don’t wait until issues that could have been dealt with turn into lawsuits. For more information go to:
Federal Trade Commission – Fair Debt Collection Practices Act Links
Although there are some bankruptcy attorneys that take the time to qualify candidates for professional credit consulting versus bankruptcy, it doesn’t happen enough. Most people who file Bankruptcy do so ill advised, or under a great amount of psychological and financial pressure. They also tend to regret it later because of the ten-year lingering affect on their credit record. This is not to say that all people can avoid bankruptcy as a means to an end. But some can.
Most creditors are willing to work out agreements with reduced payments, and/or reduced interest factors with consumers to help them avoid filing a bankruptcy filing. If a Chapter 7 Bankruptcy is granted, most unsecured creditors would not recover any of the debt amounts owed. If a consumer is placed in a Chapter 13 Bankruptcy (Wage Earner Plan) only a portion of the debt may be repaid to creditors.
In most cases, Credit Restoration strategies applied correctly actually help consumers and “believe it or not” strengthen their credit ratings. In some sense, it is a personal issue concerning an individual’s moral obligations to repay their debts. In order to make the best decision, don’t make rash decisions about filing for bankruptcy. Bankruptcy would remain part of your credit history for ten years from the date of the initial bankruptcy filing. Carefully consider the other options available. The easiest way out of a situation may not be the best way.
As well, on April 20, 2005 the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was enacted as law. Filing for Chapter 7 Bankruptcy has become more difficult and now more costly than it may have been in prior years. Chapter 7 Filers must now undergo a “means testing” process to determine whether or not they can legally file Chapter 7 Bankruptcy for a full discharge of unsecured debts. Chapter 7 filers could also be placed into a Chapter 13 Repayment Plan with a Trustee of the court administering court required payments to creditors.
Credit Counseling by a “court approved” Non-Profit Credit Counseling Agency is also required by the new law. Again, keep in mind that the Non-Profit Agencies primarily do work on behalf of the participating creditors.
For additional information on Bankruptcy go to:
Bankruptcy Basics – United States Courts
Bankruptcy: An Overview – Cornell University Law School (Legal Information Institute)
American Bankruptcy Institute
The Credit Restoration process is an essential part of financial recovery after bankruptcy. Credit reports are not updated with the status of previous debts owed until the bankruptcy is fully completed. Creditors also may not update accounts discharged through bankruptcy without adequate evidence. Although the initial filing stops creditors from pursuing collection measures, the liability remains until the court formally discharges the debts.
Some individuals file bankruptcy only to have it dismissed later. Creditors have become quite aware of this occurrence. For that reason, creditors do not discharge debts owed based on a bankruptcy filing alone. The initial filing only prevents further collection activity, legal actions and creditor contact.
As well, the bankruptcy attorney’s job is usually completed when you receive a letter of “Discharge of Debtor” from the United States Bankruptcy Court. Attorneys are not responsible for updating any previously reported information to the credit reporting agencies. Nor is the U.S. Bankruptcy Court. Credit reporting is a separate issue apart from the bankruptcy process.
Yes. In all identity theft or credit fraud cases resolved for clients, one thing can be noted. It does require a more in depth investigation pertaining the debt(s) origin to get fraudulent accounts removed from credit record files. But it is possible.
It makes no sense for an individual to suffer financially because of another person’s criminal behavior. Although, it happens on a much larger scale than people think. It is a growing problem nationally. Not only do creditors lose millions of dollars, but also the person wronged suffers financially.
Under guidelines of the Fair Credit Reporting Act, consumers believing that they are the victims of credit fraud can get their credit reports for free.