Daniel Gershburg

A common question I have from clients is how long it will take them to get their credit back to normal levels post- Bankruptcy.  Initially, your credit score will drop significantly when filing for Bankruptcy.  However, for most clients that would have been the case regardless of whether or not they actually filed for Bankruptcy, as their unpaid credit cards/judgments would have lowered their credit score even without any Bankruptcy action.  Bankruptcy basically wipes the slate clean and takes your credit score down BUT it also allows you to wipe off those unpaid credit cards and judgments so you can start to SLOWLY and correctly re-build your credit again.  As to how long it will take you to get credit cards after you’ve filed for Bankruptcy,  the answer ranges but you should  begin to receive credit card offers within the first year or year and a half after filing for Bankruptcy.  I’ve even had some clients who have had credit card offers only 6 months after filing for Bankruptcy.

The best thing you can do is to borrow responsibly, if you do decide to borrow.  Show lenders that you’ve had some issues in the past but have gotten through them and now you can handle and manage any debt that you may have.  Perhaps the easiest way to do this is to apply for a secured credit card.  Its almost the same thing as a gift card.  You give the card issues $500, and they issue you a credit card with a limit of $500.  Just be careful and watch out for any high fees, etc.  Bankrate.com has a great database which lists the fees/expenses of many of these secured credit cards.

I just came back from a meeting of the creditors…the dreaded “meeting with the trustee.”  Most client were represented by a capable attorney.  Two clients were not.  Instead they filed all of the paperwork on their own or had a company that rhymes with “Schme the Veeple” file it.  Guess what happened.  The first client, who prepared his bankruptcy filing on his own, had his case dismissed.  It wasnt due to the fact that there was any fraud or hidden assets.  Instead, it was dismissed because he didn’t file the required paperwork.  Why you say?  Because he didn’t know what the required paperwork was or where to find that paperwork.  The second client fared even worse.  The client, who went to “Schme the Veeple” to file the case received some bad advice (even though you’re not supposed to receive any advice there.)  Long story short, the client wasn’t aware of the fact that he could only exempt $50,000 in equity from his house if his name is on the dead, regardless of whether he filed for the Bankruptcy jointly with his wife.  It will likely end with the client losing his house.  Which is sad…and ridiculous.  I have said it before and I will say it again, I understand why people don’t want to pay an attorney $1500 if they think they can do it on their own.  For some people, that may be ok.  However, for most people out there, Bankruptcy is way too complicated to go at it alone.  Can you keep you car?  Can you discharge unapaid taxes, student loans, etc?  Can you keep your home?  All of these questions have to be answered by a trained, experienced professional.  It really does not make financial sense to save $1000, when you could lose your home, or have your case dismissed.    Please make sure you really think about going at it alone, as it may cost you much more than you save.