What will bankruptcy do to my credit?

            One of the most common questions I am asked when people are considering bankruptcy is “What is going to happen to my credit?”

            The answer is “it all depends.”  There are numerous different scoring models, created by many different companies.  The most common is the FICO score, created by the Fair Isaac Corporation.  Unfortunately, Fair Isaac Corporation and their competitors do not disclose the formula used to calculate your credit scores, so nobody can tell you exactly what will happen to your credit score when you file.

            Some people file bankruptcy while their credit score is still very good.  For instance, if you have always paid your debts on time and have a significant amount of debt, your score may be very high.  However, if you have lost your job and know that you will not be able to make payments going forward, you may consider bankruptcy.  If this describes you, you will likely see a decrease in your credit score, simply because a perfect credit score has nowhere to go but down.

            However, most people who file bankruptcy have several late payments, repossessions, foreclosures, collection accounts, judgments, and/or charge offs on their credit report when they make the decision to file bankruptcy.  These people go into bankruptcy with a very low credit score and they actually see an increase in their credit score, simply because it has nowhere to go but up.

            When creditors see that you have filed for bankruptcy, they see you as a good credit risk.  First, all of your accounts will show a $0 balance and a $0 monthly payment, leaving you more money to pay your new debt.  Secondly, you can only file Chapter 7 bankruptcy once every 8 years, so they know that if you fail to pay, they can simply garnish your wages or bank account without fear that you will file Chapter7 again (although you may be able to file a Chapter 13 before then).  Third, they are not concerned that another creditor will garnish your wages or bank account leaving you without money to pay them.  Finally, people who file a Chapter 7 generally are trying to reorganize their life, pick up the pieces, and turn over a new leaf.

Often people think that they will not be able to get credit for ten years after bankruptcy.  That is simply not true.  While it is true that a bankruptcy shows up on your credit report as a public record for 10 years, the impact will be reduced as time goes on.  In fact, most of my clients receive offers to obtain credit cards or purchase cars right after filing bankruptcy, often at better interest rates than their friends and family who have not filed bankruptcy.  If you maintain any new accounts that you get after your bankruptcy discharge, you will have excellent credit in no time!

If you would like to discuss your specific situation, contact Simplified Document Solutions-$249 Bankruptcy  by calling (678) 490-5841.

Atlanta debtors are saving thousands using paralegal services

The U.S. Bankruptcy Court in Atlanta is reporting a substantial increase in pro-se bankruptcy filings.  Pro-se debtors are those advocating on their own behalf before the bankruptcy court, rather than being represented by an attorney.  Many ask how they are able to represent themselves and if they are successful.

The average attorney in Atlanta is now charging $1500 for even the most simple Chapter 7 bankruptcy petitions, and many are charging in excess of $2500.  These same attorneys will hand your file off to a paralegal to do everything.  Depending on the attorney you select, you may not even get the chance to meet with the attorney, as everything is done by the paralegal.  More and more often, Debtors are choosing to go directly to the paralegal, avoiding the attorney markup.

There are a couple of ways that debtors represent themselves in bankruptcy court.  First, one can download the forms from the court website.  I tried to help a friend do this a couple of years ago and even with 7 years experience in the bankruptcy system, I found the forms to be a nightmare.  For the life of me, I do not know how an individual with little to no experience with the Court system can get through this.  In fact, many of the people that try to do this are unsuccessful due to the complexity and sheer number of the forms.

A second, and slightly better option, is utilizing software that can be purchased online.  This will probably help ensure most of the forms are completed and makes completing them infinitely easier than trying to do it without software.  The software generally only knows the official national forms, which is MOST of what you need, but will likely not include local forms and the software engineers are not familiar with local court policies and procedures.

The third, and probably the best, option is to hire an experienced bankruptcy paralegal, or petition preparer.  The bankruptcy code permits non-attorneys to assist pro-se individuals pursuant to 11 U.S.C. 110.  Petition preparers are certainly not all created equal.  Some preparers will only meet with clients online or over the phone.  Some preparers advertise all over the country and do not specialize in local courts, this poses the same problem as online software companies do.  Yet others do not comply with all of the requirements of the law and do not disclose themselves to the Court.  Failure to disclose yourself as a petition preparer is criminal and can case thousands of dollars in fines to be assessed.  If your preparer is not disclosing themselves to the Court, one has to ask, What are you hiding?  Perhaps it is because they have been banned from assisting individuals with their bankruptcies, likely for screwing someone's bankruptcy up.

I have over 7 years of experience with filing bankruptcy petitions in the Northern and Middle Districts of Georgia both pro-se and under attorneys.  I have prepared thousands of bankruptcy petitions, discharging millions of dollars in debt.  I comply with all aspects of the law and will make my self available to you throughout the entire bankruptcy process.

 

If you are considering filing bankruptcy, and live in the Northern District of Georgia, I would love to help.  I charge a flat rate of $249 for both Chapter 7 and Chapter 13.  For that $249, I can help you obtain a credit report, prepare ALL of the documents that you will need to file your bankruptcy in Atlanta, I will bring them to your home and review all documents with you, and remind you of your hearing.

I can be reached at (678) 490-5841 or visit my website at http://www.249bankruptcy.com.