Secured Credit Cards

Does it feel like your good credit has fled the country?
One credit repair professional told me all about how to get all the bad things off of my credit reports. Most credit repair people operate this way. Sounded great at the time. At some point, however, I realized that based on what I knew about credit reporting, then once the bad stuff was gone, there would be nothing left at all. An old HeeHaw song came to mind, “If it weren’t for bad luck, I’d have no luck at all.” I was pretty sure I was right, but he just kept saying, don’t worry about it. I found out later that I should have worried about it, I should have worried about it a lot, and I should have worried about it a whole lot and a whole lot sooner.

Yes, once the credit repair of my credit reports was done, they were newly baptized and cleansed of the sins of the past. Yet they were newborn babies with no credit history left on them. Tabula Rasa. I had been right all along. At that point I did what so many lawyers do, I got mad and was done with him as my credit repair guy. I didn’t ask and he didn’t offer any way to quickly somehow fix the situation. I should have. Instead, when I realized that I had been right, without the aid of anyone, it took me another year to rebuild my credit scores and rating using traditional methods, and in the mean time, home prices soared and I was punked by my own actions and inactions.

The solution that my wife and I did use was this: which was both simple and effective, and also slow. Not an overnight solution but it worked like a charm. A long slow charm. I went into my own bank, and bought a credit card. It’s called a secured credit card. Give them $300, $500 or $1,000 and they give you a credit card with a credit limit of $300, $500 or $1,000, however much you give them.

As a married couple, or if you have a long time significant other, (don’t do this with someone hardly know) you each go to your bank and ask for a secured credit card, and after a little while, put each other on each other’s card. Then each has two credit cards with which to build a positive credit history.

Of course, if you don’t have that that special someone, just go to a different bank and get a second secured card. 

From there, it’s a matter of creating a favorable credit history. There are several factors that go into that formula but the essential steps are: 1) Never miss a payment 2) Keep Low Balances. 3) Pay more than the minimum payments.

An excellent method of creating this credit history is to only buy something on the credit card when you have the cash already in your own savings account. So, say you want a new gigantic flat screen TV. If the TV costs, $1500, first put the $1500 in the bank, then use the credit card to buy the TV. Now what you do is to pay off the secured credit card in 3rds over 3 months.

Your good credit’s greatest enemy is in most cases, your own family’s dire needs. If someone in your family is having a rough time and says “hey, I need $800 to pay off a gambling debt,” or “pay my rent” or “pay my dentist” or “pay my car payment before it gets repossessed” or . . . Whatever it is, you must tell them to hide from the bookie, hide the car, brush and floss a lot, and wait a while.

Pay your credit card off in 3rds. If you give away your $800 you have poisoned your credit score!!!

And what’s even worse, he’ll probably just gamble your $800 away too. If the car payment is brought up current status, and they still don’t have a job, then in a couple months they’ll be right back where they are today. If they are behind on rent now, next month they probably will be again.

My favorite example is the dentist, if they pay the dentist and the tooth is fixed but because you helped them, your plan to repair your credit gets derailed, then you have ruined your ability to really help your family when things get truly critical. If you can buy your house at a low interest rate, then you’re either buying more house or doing it at a lower payment. Either way, he can move in with you. Perhaps more importantly, with a low interest rate and a more affordable house payment, you can help more people in more ways. And that can make it possible to truly help your family when times are tough and you’re all struggling.

While using the Secured Credit Cards is an effective way to build your credit scores more or less organically, however, it can be done faster. Have a look into the Attorney’s Guide to Credit Repair for details in the links at the right and below.

Don’t be a knave-faced Jackanapes like I was. Exceptional credit can make it possible to help your family in ways that you wouldn’t otherwise be able to do with merely decent or even good credit. Guard it carefully.

What You Don’t Know About Identity Theft

Identity Theft Starts in the Home

Identity Theft is not just someone opening a credit card in your name, though that still happens all the time. 

No, it’s more likely to happen when you have to move back in with your dad and while you’re at work, your step-mom puts all the utilities in your name and then doesn’t pay them for several months.

Perhaps your brother or sister gets pulled over for DUI and gives the arresting officer your old Driver’s License, the one that went missing and you thought you lost it, and then guess what, she or he looks so much like you the police are fooled into thinking it really is you. Be careful making those rolling right turns from now on. 

When your sibling and her spouse realtor who moved in with you because they were broke, but somehow they and their friend the Notary Public suddenly come into money and you can’t figure out how? Stay home sick from work for a few days near the end or beginning of the month AND make sure that you are the one who gets all the mail from your mail box. You might find out you have a new second mortgage. Surprise!

Perhaps the most important thing you can do to protect yourself is to know how to spot when a person is less than truthful. Most of the time we get into trouble because we know something is wrong and choose not to confront the person who is trying to pull the wool over our eyes because we love them, so we decide to trust them. Don’t be complicit in your own demise.

I knew a man who awoke one day to find out that he didn’t own his own home anymore. Turns out there had been a “For Sale” sign hanging on the Zillow.com website over his head for months. I know these sound preposterous in the extreme but guess what, I’ve seen both happen.

It can also be done basically as a con-game. The con-artist induces you to give them money, but since you don’t have enough cash, so you end up using your own good credit to do it. Of course, the con-artist never pays you back. That’s not even the worst part of it, the con-artist may not even know that the con-artist is a con-artist. He probably tells himself he’s going to pay your back, or maybe she is just down on her luck and you’re the only contact they know, so you’re the only mark. You just happen to be the “rich uncle” in the family but unfortunately, you are cash poor, you’re broke. Just not as broke as they are . . . at least not until they get done with you.

When you’re helping family, and suddenly you find your daughter-in-law has a new Camaro, expensive tattoos, long red hair, and a penchant for sushi but a budget for fish fingers, crayons and an old Dodge Rambler, it’s time to check your own credit.

How did she possibly pay for the make-over when your son tells you that they’re saving up, because they want to buy a home of their own. Somehow she’s got this wonderful make-over? Eventually, you’re going to find out that your good credit also has a wonderful make-over, or perhaps a make-under. . . . 

Identity Theft Comes From Friends Too

Cosigning for a new car for a friend or family member is often a mistake. Especially when they then don’t or won’t pay the monthly payment on the car loan and leave you holding the bag. 

Again I’ve seen this happen more than a few times. You cosign for the car, (or worse, you just buy one) for your “Bestie” who then doesn’t pay for it and in fact disappears with it. 

When your “Bestie’s” bank sues you, they’re going to sue you for the whole balance, you won’t even get the benefit of the repossession reducing the balance that you owe because of course, the car has vanished. 

Not only does the bank sue you, they may also report you to the police as having stolen the car or for being an accomplice to the theft. I mean, that probably won’t stick, but you won’t really know until you talk to the Public Defender who gets assigned to your case. You might not even be arrested at all depending on a lot of actors that you have no control over.

If you’re lucky they’ll just garnish your wages until you file a bankruptcy, and even worse, you can’t just claim it was a case of Identity Theft because you signed the loan. Therefore, yes, you do have to file a bankruptcy to get out of it.

Beware of Fake Collection Calls 

Sometimes people are just flat out not who they say they are. You think he’s your savior and he turns out to be just another guy who likes meditation and yoga. 

Sometimes your credit might be destroyed by your boyfriend or girlfriend who memorized your credit card numbers. After you closed the accounts she or he then called the credit card companies posing as your husband or wife and asked that the accounts be reopened. Yes, I’ve seen this happen too. 

But nowadays most of the time, it’s a phone call. Someone calls who knows everything about you, your current unlisted number, your current address and you’re not even on the lease, and he knows your addresses for the last fifteen (15) years. He wants you to pay for an account of a credit card he says you still owe from 2004; even though you haven’t paid on it since 2005 and you filed a bankruptcy in 2007 listing that card. For some reason he’s now threatening to sue you, or send a 1099 to the IRS or to blow your security clearance with your command.

Can he do all that? Of course not. The bankruptcy took care of it. If you didn’t file bankruptcy, then the Statute of Limitations took care of it, unless the card in fact sued you. But if he’s not saying the card did sue you and obtain a court judgment, but that what he wants to do is to send a 1099 to the IRS, then there is no judgment.

Because if they had a judgment, you won’t get a phone call, you’ll just pick up your check and find out that a fourth of it is missing. For some reason he won’t give you the company’s address, and the company name is a mashup of two legitimate debt collection agencies you find on the Internet. It’s crap, he’s a liar and he’s trying to commit fraud and you’re the mark. Hang up and block the number. 

My favorites are the fake IRS calls. The IRS doesn’t call you to ask you to pay up. They’ll send you letters telling you to call in or they’ll put a lien on your house. They’ll write to you to tell you to call in or they’ll garnish your wages. They’ll write to you to tell you to call in. But if the IRS tells you anything like that, it will come to you in a SNAIL MAIL LETTER. THEY DO NOT CALL YOU ON THE PHONE TO ASK FOR YOUR BANK ACCOUNT NUMBERS OR YOUR CREDIT OR DEBIT CARD NUMBERS, EVER.

My second favorite are fake calls from creditors several years after bankruptcy using information from your bankruptcy to make you feel like it’s a real account and who are asking you to pay an account which was included in your bankruptcy and saying that it wasn’t included in your bankruptcy. Call your bankruptcy attorney if you’re not sure. If you signed a reaffirmation agreement they might be right that you owe the money, but if that’s the case, then it will be easy to prove that a legitimate collection agency actually does exist and where they’re located. 

Did a creditor sue you in your bankruptcy case and win a judgment against you stating that your debt to that creditor was not going to be included in your bankruptcy discharge order? If that’s the case, then finding out who the collection agency is will be easy and quick or you’ll just wake up and find out your bank account is empty.

Fake calls come from untraceable numbers through Voice Over Internet Protocol (VOIP) phone lines and you’re never going to figure out who called or from where. Tell them to leave you alone and hang up, that particular scammer will probably never call back. 

The famous Nairobi email scam and various permutations of it are still going on all the time. I actually had a client who got caught by that one once but at least he got a car out of it, and ruined credit too. 

Social Media Hacking is Identity Theft

Have you had it happen to you yet?

This week I received a new friend request from a current friend. I sent him a messenger message and asked why he had sent me a friend request, Did you unfriend me? He said no he hadn’t unfriended me nor had he sent the new friend request.

It’s about the same thing as reaching for the sugar and finding poison. I drew that cartoon as an homage to Orwell’s 1984 in about 1985 . . or 83 or at least I know that Pat Benatar was the greatest woman in Rock ever.

I searched for my friend’s name in the search bar at the top of the Facebook page and found that not only was I still friends with the same guy but also he had this new profile using his same profile picture and his name spelled identically down to the middle initial and the new profile had sent me the other friend request. This new version of my friend was already friends with 18 of his current friends from his original profile!!!

It’s truly horrifying. Those 18 friends will shortly all be victims of some sort of scam, though most will figure it out. But unless he contacts them all directly right away to say it wasn’t him, one of them might get scammed first. Thankfully you can contact Facebook directly and tell them, “hey that’s not me but someone is pretending to be me.” In my case, I contacted them to say that it wasn’t him but someone pretending to be him.

I once received a Messenger message from a scammer who said that he was on vacation in London and had been robbed and lost his passport and all his money and credit cards and could I send him $817 to pay for a new plane ticket home? At first, I was checking my credit cards to see if I had one I could use to buy him a plane ticket, but he wanted the money wired instead.

So, I thought about it and realized that if this person were truly in London and lost his money and passport then why and how was he messaging me? Surely he has friends with more money than I, and closer friends too, (I hadn’t spoken with him in years) and friends who could almost certainly access his accounts at home, but . . .

Hey, why can’t he get into his own accounts anyway? That didn’t make sense. Just telephone your bank and go through all the security questions and then they’ll tell you where to go to get a new debit card even though you’re in London.

Someone Starts a Business in Your Name?

Has this happened to you? I’ve seen it over and over again. Your dad, mom, brother, sister, cousin, uncle, best friend, wants to start a business but can’t do it in their own name because of the IRS, the Mafia, a biker gang, bad credit, an ex-wife, or ex-husband will put a stop to it and take all their money.

So, your name goes on all the paperwork.

If you’re lucky, you’ll actually get the percentage that they promise you for using your good name to operate their nefarious enterprise.

If you’re really lucky they aren’t doing something that lands you in jail but just ruins your credit.

Either, eventually, the business makes a lot of money but for some reason you never get any and then one day they’re gone and so is all the cash and all the easily movable equipment with any value and you’re left holding the bag.

Option two, eventually the business just flounders and sputters out because they weren’t very good at whatever the business was supposed to be doing in the first place, and that was why they put it in your name all along.

Thanks, next time, go ruin your own credit and leave me alone. This one is especially hard because you think you’re helping out someone you love or trust and they take advantage of you while you let them. If the business is so great, tell them to put the business in their own damn name.

You Thought you had Great Credit

Now your house is gone, your car is gone, your woman or your man is gone. And you realize that you hadn’t paid enough attention to your financial circumstances, and your credit. 

Basically, as it turns out, because someone else turned out to not be who they said they were, you’re no longer who you thought you were either. 

Everyone nowadays, before a first date, has perused all the social media available to make sure that the new person isn’t unemployed, an alcoholic, or has a girlfriend, boyfriend, wife, husband or likes cats but hates dogs or vice versa. Back in the day, before Facebook and all the rest, a nice man asked a wonderful woman to marry him. Well, before she would answer, she drove down to the Family Courthouse and looked up his divorce file. Turns out he had been an abusive husband who was also a deadbeat on his support payments to his little children who live with the ex-wife in Altoona. He had given her a nice TV for Christmas, and when she broke up with him, he took it back while his children sat and cried on the floor in front of him.

Driving to the Family Courthouse is still a good idea of course because most of the stuff in a divorce case file won’t be online. You can look up who sued you and usually find a copy of the summons and complaint but not in a divorce case, so the drive to the court  house is still a good idea.

However, before the second or third date you could nowadays just ask to look at Credit Karma on his or her phone. My Wells Fargo account on my phone will give me my credit score.

Don’t forget to also protect yourself by having an Identity Theft plan in place such as through Lifelock. 

How Do You Recover From Identity Theft

Pretty much the same way you do from any kind of bad credit, you go to work repairing and fixing your credit reports. The disputes are still required they just have a different message: “It wasn’t me.”

Credit repair requires effort on your part, but it’s not hard, and if you do it right, it’s effective and can shoot your scores right back up to where they are supposed to be. Affordable price, and your own effort is free. But I don’t know how, yes you might say so, but this guide tells you exactly how.

Yes, I will get paid a small referral fee when you buy it. And yes, you should buy it. Click Below.

The Attorney’s Guide to Credit Repair, download it now and get started. It’s fast, affordable and guaranteed.

Buy The Attorney’s Guide to Credit Repair

I’ve been a bankruptcy attorney for about 20 years and when it comes to credit, I’m the Grim Reaper. I am Charon, and I ferry you across to the land where your debts have deceased. For a small fee of course. Sometimes your debts die a long slow death but more most debts, it’s pretty quick and almost painless.

Your Good Credit is the collateral damage. I ruin credit for a living. 

So when my own credit needed a spit and polish some years back, I did what most people do, I looked up a credit repair service or credit repair attorney and paid them good money to repair my bad credit. For a bunch of money they said yes. Great, I handed over my money and then a little while later, we went in for an appointment to sign some paperwork. 

The paperwork consisted in a bunch of letters disputing everything in my credit reports which impaired my potentially positive credit rating. Once I saw those letters and how they were written, I realized that I could have done all of those letters myself without much difficulty; if only I had the time to figure it out on my own. I hadn’t had any idea that the process was going to be as simple as it was. I was wholly annoyed at how little work it might have been for me to figure it out on my own. I’m an attorney so that was something that I was good at to begin with.  I had just been so busy that I didn’t feel like trying to figure it out because that would have required digging into code sections of the federal codes that I hadn’t been familiar with at that time. So, it sounded like much more work than it really would have been.

Even worse, I happened to notice, on a desk of a paralegal . . . as I was heading for the restroom, a handy dandy guide to do the work with a catchy name. A book with templates and instructions that would have told me exactly what I would have needed to do in order to repair my own credit myself without having to pay anyone to do it for me. Yes, there is a small fee for the guide book, but you can afford it. 

Get the same Guide, Follow the program, and you will increase your credit score.

And yes, I do get paid a small commission for referring you to the same credit repair guide that the pros use. And yes, of course you should buy it.

To buy the same Guide, The Attorney’s Guide to Credit Repair, CLICK HERE

Credit Repair Testimonial

Ever feel like something is missing?

Credit repair is not easy without help. However, repairing credit is not an insurmountable task. Many have done it and most anyone can.

Bad credit is the ultimate dream-thief.  But good credit can make dreams come true. There is light at the end of the tunnel.

Because, what does it take to make dreams come true in America today? Given some thought, is there anything important or fun that doesn’t require either money or credit? Buying a dream home? Having children? Putting them through college? Donating to charity? Even getting others to donate to charity? Or buying that dream car? Or even just buying a reliable car that doesn’t break the budget.

One person wrote: “I had a 423 Credit Score 10 years ago. I wrote letters, agreed and paid 50% on the debts I owed and pretty quickly recovered from it and was able to buy a home. . . . My mortgage broker calls me a success story. I took his advice and wrote the letters, negotiated my debt and today . . today, I have amazing credit and have since been able to buy 4 homes, including my dream home I now live in!”

That was a clever broker who was able to tell what to do and how to do it. Fortunately no litigation was required, just the basics. Anyone can do this. Most all of the steps required for most credit repair doesn’t require more than just the right letters, and negotiating a few of the debts if they are still fresh enough that they will have to be paid.

Most of the time, credit repair won’t require more than this. Writing the right letters to the right people and speaking to them in the right way, and on top of that settling debts when necessary.  I asked if I could use the testimonial got the yes, of course, or I wouldn’t be writing this post right now.

For the SAME information from that clever Broker CLICK HERE

You Can Repair Your Own Credit

I’ve used a credit repair service myself, and I’m an attorney. At that time, I didn’t yet know that someone had already written a simple easy to use of Guide to Credit Repair.

So, why didn’t I just do it himself. There’s a simple answer to that. Attorneys are busy people, me included. For me it’s even a little bit worse than for other attorneys because I like to manage my cases from the start to finish and from the ground up. I don’t use paralegals and my wife is my part time receptionist. I even answer the phones. It streamlines the way I do my legal business and my area of practice is bankruptcy. So I know a lot about ruining your credit. That’s easy, don’t pay your bills, get sued, have a car repossessed and voila your credit is toast. Perhaps, I should have added a picture of a toaster instead of my cat.

In my law practice I pretty much only take bankruptcy cases, I don’t have a lot of spare time to learn a new kind of case, or at least I don’t have time that I want to devote to learning new types of cases. Being a bankruptcy attorney is time consuming enough, especially when you’re also a full time paralegal, full time secretary, and sometimes I have to empty the bins and vacuum. I like it, it’s a quiet simple life that I enjoy, I love getting people out of debt. 

However, all that said, and especially at that time, if I had had to spend the time to learn how to fix my own credit, I really didn’t have the time to do it. There are dense Federal Codes to study, and then the State of California has plenty of statutes that sometimes add things that aren’t in the Federal codes. Combing through the statutes and codes takes time, figuring out how to write credit repair letters would have taken a lot of time, effort and I knew that I just didn’t have that time. And sure once you’ve got the letter written, you can reuse it, we do that all the time but I hadn’t yet done my first one. And I didn’t want to learn. 

So I started researching for a credit repair company or service near me. There were a few, so I asked a couple of attorneys I know and received a couple referrals.

$1500 dollars later I was on my way to clean credit and a new life and a new house.

So, I’m not a complete dork, and I know that the paralegals do most of the real work so I spent a little time letting my wife speak to the attorney while I walked around getting lost on the way to the restrooms and what I learned was that the paralegals were using basic templates to write letters and that those basic templates came from a credit repair guide book which had been printed out, three hole punched and clipped into a binder. You see, I had seen a guide to credit repair on the Internet but I thought it was a scam, because I was an attorney. I ignored it. Yet, here it was, the company charging me $1500 was using the guide that I had ignored. 

So I said earlier that what I found out that these companies do, surprised me. And it did surprise me, because while they’re doing proper legal work for you, they’re just doing basic DIY credit repair for you that you can do for yourself.  You can repair your own credit.  

Yes, there is a big secret to credit repair: you can do it yourself. The guy doing my credit repair so that I could refinance my house and buy a second house was using a guide that he had downloaded from the Internet, three hole punched and shoved into a three ring binder. I guess the binder made it official.

I know that most of the time, in most law practices we use those kinds of things. They just normally come from a seminar costing $500 to $5000 and the books are an extra $500 to $1000 with an annual update costing $250 to $500 and still requiring a lot of expertise to make sure that they are properly implemented. Yet to repair my credit, it cost that firm around $37 or $47 and he was charging me $1500. That’s a good deal.

Of course you can do a lot of kinds of legal work yourself, people do their own divorce work all the time, but it’s complicated, fraught with pitfalls and you can easily make mistakes. And if you make enough mistakes, you can prejudice your judge against you and then you’re in a world of hurt. That’s true with most types of legal work.

But in credit repair work, you’re almost never in front of a judge, and because of the way the laws about disputing things on your credit reports is written, if you do it wrong this month, you can try again next month. And if you have the proper guidance, say from an attorney who has written a guide to repairing your own credit, (not me, I didn’t write it) then you can write those letters correctly the first time. Attorney Shapiro even guarantees his own guide: The Attorney’s Guide to Credit Repair. 

So all along I could have been doing my own credit repair myself and saved about $1,450. That floored me. So, was there some credit repair secret that I didn’t know, YES!

I could have downloaded the same book and saved nearly $1500. Back then I could have gotten my family annual passes to Disneyland with the savings. Nowadays I could get the family into Disneyland for one day but we would have to split a meal  . . .  but only if we brought that meal in with us in our pockets and purses.

Times have changed, if you want Disneyland season passes for a family of four nowadays, the first thing you have to do, is:

  • Buy and Download The Attorney’s Guide to Credit Repair
  • then repair your credit
  • then apply for a credit card and be approved
  • then you can finally buy those Disneyland season passes
  • pay off the credit card as fast as you can

Get the Guide NOW, the sooner you download it, the sooner you can get started, the soon you’ll have the positive results you need. Does it really make sense to wait any longer? 

It’s simple math, you can do the work required, you can afford The Attorney’s Guide to Credit Repair and they even guarantee it. Download it now. 

What you need to know before you decide to sell, refinance or file bankruptcy

Have you ever found out your home had a lot of equity? If you’re like me and everyone else in the world, you thought that if you could just refinance and pay off the credit cards, that would fix everything. 

Maybe it would. It might help a ton in fact. But it would depend on how much equity was in your home. How much equity we’re talking about. Let’s say for example that Tarzan and Jane owe $30,000 in credit cards and own a home worth $450,000. They each make $40,000 per year. They have two children, bad credit and their monthly credit card payments add up to $1050 per month.

Upside Down or No Equity

If their house is upside or has no equity, they might just file a Chapter 7 Bankruptcy and be done with the credit card debt. As a married couple with a family of four and eighty thousand per year in income, they would qualify for a chapter 7 bankruptcy in California and wouldn’t lose the house to the Bankruptcy Trustee assigned to administer their bankruptcy case. Bankruptcy Trustees are only interested in equity that they can actually impound, in their case, there is little or no equity at all.

The only risk is that Tarzan and Jane are paying for a house with a loan of over, or equal to $450,000. That’s a big loan with a big payment. They should probably fix up their place as much as possible, do it fast, and sell it to buy a house they can afford. Their payment on $450,000 is probably $2700/mo depending on the Homeowner’s Association Dues and Escrow Impounds and whether they have had the loan modified or not. So, they could file bankruptcy, get out of the credit card debt and if they can budget really well, they might stay in the house or sell it or even short sell it and find a rent that they can better afford.

Small Amount of Equity in the Home

See above but now the short sale is off the table so that at least when they sold, if they did, then they wouldn’t have a bankruptcy plus a short sale on their credit and that’s good for everyone. It also means they have a lower balance on their mortgage and that means maybe they should stay, at least they’re on the positive side and their payment is likely lower than in the first example supra.

Significant Equity in the Home

Of course this is where I wanted to get to in the first place. Now there are some real decisions to be made and not all of them are rosy. Let’s assume there’s $140,000 in equity, so that on the $450,000 house they only owe a mortgage with a balance of $310,000.

At least, at $310,000 in mortgage debt, Tarzan and Jane probably have a mortgage they can afford of something in the neighborhood of $2000 per month depending on impounds and etc. For a family of four, that’s comparable to what rents would probably be if they moved. So they wouldn’t want to move because the equity and the affordable house payment.

So what are the options?

a) Just Keep Paying Your Credit Card Payments

The average monthly credit card payments are probably about $1050 per month or even more if they just continue paying them. It will take a long time to pay them all off if Tarzan and Jane are only paying the minimum monthly payments. In the end they will have paid off nearly $100,000 because of all the interest. So this is not a good plan. 

b) Sell Their Home and Buy Another

This is a terrible option for obvious reasons outlined above, there’s plenty of equity and an affordable payment. Selling in order to pay off credit cards is a terrible idea. Besides where would they go? They would have cash but bad credit and a decent income. That and a couple dollars will get you a cup of coffee but not another house.

c) Chapter 7 Bankruptcy

I like chapter 7 bankruptcy more than chapter 13 in most cases, but not this one. Tarzan and Jane are too young and healthy. Chapter 7 is the Straight Bankruptcy or also called a Liquidation Bankruptcy where you’re in and out again in about four (4) months, however, the Trustee’s job in a Chapter 7 is to collect assets from you, liquidate them and pay them to your creditors. Tarzan and Jane have $140,000 in equity, but in California they can protect only $100,000 in equity in their home at best. Have a look at Calif. Code Civ. Pro. 704.730.

Certainly, if one of them were permanently disabled, on social security, or had a letter from the VA so stating then they would be good to go. In that case they could protect up to $175,000 of home equity in a chapter 7 bankruptcy, in California. (See Link above). Even if no one has stated that they are totally  and permanently disabled or close to it, and if one of them cannot participate in gainful employment, then they should go to the doctor and get one or two of them to sign off on it. Or if either were over sixty-five (65) years old, then that works too, and they could protect up to $175,000 in home equity. 

There’s another option for people over fifty-five (55) and low income, (but that one hardly ever works). If Tarzan and Jane could protect more equity than they actually have, then they could file a chapter 7 bankruptcy and keep the house no problem and since $175,000 is greater than $140,000 in equity, they could file a Chapter 7. Unfortunately . . . 

Turns out that we’ve already decided that Tarzan and Jane have two munchkins still at home. Tarzan and Jane are probably young-ish and they are not disabled since both are working and making $40,000 each. So the disabled protection for home equity is not going to work for them and the low income over fifty-five (55) is not going to work either. So they can protect only $100,000 of the equity or $40,000 less than the equity that they have.

In a Chapter 7 Bankruptcy the Trustee would sell their home and give them a check for $100,000. But where can they move with only $100,000 and bad credit? I think we may have seen this movie before. But with a bankruptcy too?  That’s even worse.

Perhaps one might think that the Trustee couldn’t obtain enough money from the sale of the home to cover the costs of sale, and while it may be close to true, Chapter 7 Trustees have other things up their sleeves. Realtors will sometimes reduce their fees. Even more importantly, sometimes the mortgage lender will take a reduction in pay off as well. Because a bankruptcy trustee does not need to be able to collect very much in order to go through with taking a home and selling it, in this case he or she probably would. It gets even worse. During the time that Tarzan and Jane’s bankruptcy were to be pending, and before the home sale were complete, if the value of the house went up and the bankruptcy trustee could take advantage of it, then the bankruptcy trustee gets the additional appreciation, not Tarzan and Jane.

So if you don’t mind the Chapter 7 Trustee selling your house for you then maybe a Chapter 7 is for you. But I don’t recommend it, not in Tarzan and Jane’s case.

d) Chapter 13 Bankruptcy

A Chapter 13 Bankruptcy gives a type of protection that a chapter 7 does not. Remember that in a Chapter 7 Bankruptcy the Trustee’s job is to take things away, sell them and pay creditors. In a Chapter 13 Bankruptcy, the Trustee takes monthly payments from Tarzan and Jane only. They would get to keep their home.

In this case, it would work like this, the home equity that Tarzan and Jane can protect is $100,000 but the total equity is $140,000 leaving $40,000 not protected. The $40,000 which is not protected is greater than the $30,000 that Tarzan and Jane owe in credit cards, therefore, Tarzan and Jane must pay 100% of that $30,000 in credit cards into the payment plan for up to five (5) years.

At least the payment plan would require little or no interest. It would require a Chapter 13 bankruptcy payment plan payment of about $625 per month in Southern California. This is almost certainly a much better cash flow than just paying the credit cards directly by about half or so. Remember that they were paying $1050 per month on credit card bills before?

It’s not a bad monthly payment really. If you need a Chapter 7 or a Chapter 13 Bankruptcy in Southern California including San Diego, LA, Orange and Riverside Counties, call me 951-200-3613. 

e) Debt Consolidation Plans

There are three main types of debt consolidations: The First is the Chapter 13 Bankruptcy discussed above. The second collects payments  from Tarzan and Jane and negotiates with the credit card companies. They form agreements with creditors to reduce payments by obtaining lower interest rates and on rare occasions also reductions in principal as well. The payment would be about what a Chapter 13 payment would be. 

The third type collects regular payments from Tarzan and Jane but lets their credit cards go unpaid for a while until those debts are sent to collection agencies and then the consolidator settles the debts with the collection agents for a one time payment for less than the full balance. This is also called Settling the Debts or Debt Settlement.

Often they work out great. Other times, not so much. Sometimes what happens is you place your five (5) or ten (10) accounts, including credit cards, small loans, medical bills etc that you owe on the table in front of him, and if he’s been doing debt consolidation work long enough, he must immediately know which ones will play ball with him and which won’t. However, what he won’t do, is tell you which ones won’t work with him. Think about it, if there were one or two that wouldn’t work with him and he told  you, you would call me instead. 

Next thing Tarzan and Jane know, one of their credit cards has sued them. If the attorney who sued them was unscrupulous, as collectors sometimes can be, then Tarzan and Jane might not even know that it has happened until they find out that their wages are being garnished. Wage Garnishments can take up to 25% of a normal paycheck. Or they might find out because their bank account has been emptied by the sheriff via bank levy.

f) Refinance or Second Mortgage or Home Equity Line of Credit

But how do Tarzan and Jane take a loan against their home when they have bad credit? Even if they have enough equity in the house to borrow enough to pay off the $30,000 in credit cards, who will lend to them? 

It’s not a question of WHO but WHEN will they lend to you? Credit Repair is what you need.

Did you know that you can repair your credit yourself? It’s easy too. You just need to know how. If you could raise your credit score enough, then you could refinance your mortgage, obtain a second mortgage or qualify for a home equity line of credit.

A second mortgage would give a much better cash flow than a chapter 13 bankruptcy would by at least half. The second mortgage payment might be only about $325 per month. So, from a payment of about $1050 per month, down to about $325 per month. That’s a huge improvement and all you have to do is follow the Guide and it’s real simple.

Of course, yes, I do get paid a small commission when you buy the guide, and of course, yes, you should buy it. 

So how do you repair your credit? Click Here for the Attorney’s Guide to Credit Repair.. It’s fast, easy and guaranteed by Attorney Robert Shapiro who wrote the Guide. If your credit is bad, you can make it good. If your credit is good, you can make it better. 

So You Might Need to Buy a New Car?

What you need to know before buying a car on credit after a bankruptcy, or after bad credit?

They love to say, they will sell you a car with bad credit, of course they will, at 25%, I might sell you my own car.

After a bankruptcy one of the easiest things to do is to buy a new car, or at least a newer car. A new to you car. It sounds too good to be true but oddly enough, it’s not.

If you filed a chapter 7 bankruptcy, the more common type, then your new car creditor knows that you can’t file again for eight (8) more years from one file date to the next. So, they know that you can’t file again, and if you can’t file again, I’d sell you a car too. If you default on the new car loan (for the new car to you which is probably an older car) then we can sue you for another however many of those eight (8) years are left. Then I can garnish your wages, levy your bank account, and record a judgment lien on your house. Creditors love doing all of those things. Especially car creditors, car creditors love to be the first one to sue you. One attorney who represents car lenders told me that if “we’re the first one to sue, maybe the debtor puts up with one wage garnishment, ignores one judgment lien on the ol’ homestead. However, when the second judgment comes along, they call you. ” In fact I might as well mention, if you need a bankruptcy attorney in Southern California, give me a call, 951-200-3613

If you do have to buy a car, and sometimes you must, then your interest rates will be absolute murder. Don’t do it. If you can avoid it, avoid it. However, with a little effort and just a little time, maybe only a couple of months, you can repair your credit enough to buy a car with a decent-ish interest rate. 

If you do nothing, and you wait long enough, your credit will be rehabilitated on its own rather like a cut on  your finger will get better even if you just do nothing. Keep working in your garden or garage where it’s filthy without washing it, without a bandage, in the filth and dust and dirt and your finger will get infected and in spite of that in the long run, it eventually gets better anyway.

But if you clean it, put some Neosporin or a salve on it and bandage it, and keep it clean, then it gets better a lot faster. And what’s wrong with faster? Nothing of course.

But you just had a bankruptcy, what can you possibly do to repair your credit after a bankruptcy? Bankruptcy is the Credit-Reaper.

There are a few things.

Be sure of course, that whatever credit you still have, whatever debts you still have to pay after your bankruptcy, be sure that credit stays in good condition during the months and years after the bankruptcy is over. Don’t get into any new debt that you cannot handle, if you have reaffirmed any debts from the bankruptcy, make sure that you stay current on those and everything else including your utilities. Utilities won’t report your good payment history but they’ll definitely report your bad payment history if things go wrong.

Good credit is a combination of not too many bad things on your credit reports compared to the good things on your credit reports. Great credit is few or no bad things compared to lots of good things.

You can increase or improve your credit rating by removing bad things and adding good things to your credit reports. One of the easiest things to do to add good credit to your credit score is to buy a car, but you don’t want to do it until you’ve already improved your scores.

Check your credit after your bankruptcy is over. It’s almost a certainty that not all of the accounts included in your bankruptcy discharge are listed in your credit reports as “an account included in bankruptcy” or “bankruptcy” or “bankruptcy discharge”.

Go to AnnualCreditReport.com and check. If even one, just one of the dischargeable accounts that existed prior to your bankruptcy is not listed as included in your bankruptcy, then that account is dragging your score down. You can correct that with the appropriate letters to the creditor or to the credit reporting agencies directly. Prove that they have you listed wrong in your credit reports and they will have to fix it.

Where you do sometimes run into some fun, and by fun I mean it like Michael Jackson did in the 80s when he referred to good things as Bad: What if the account which is bringing down your score is also an account which for some reason was not listed in your bankruptcy in the first place, also called an unlisted or omitted account. Now what do you do?

Unlisted or Omitted Accounts are considered not discharged by the bankruptcy code unless two (2) things didn’t happen. See 11 USC 523 (a) (3). However, you can see from that code section that an omitted debt is nevertheless discharged if those two things didn’t happen. Here’s a hint, there is a case called In Re Beezley in which the Ninth (9th) Circuit Court held that the code section really does mean what it says that it means.

The first thing that had to NOT happen was, 1st) Did the Trustee on your case figure out that you may have assets which means that he would set a deadline called a claims bar date for creditors to turn in a proof of claim? When a trustee finds that you have assets, it’s called an asset case, and if no assets, then it is a no-asset case. In a no-asset case, the Trustee files a report with the court called a No-Asset Report. In the bankruptcy court’s court docket it will probably be listed as a Chapter 7 Trustee’s Report of No Distribution. If the Trustee did impound assets and distribute to creditors and the one you now have found was never listed, then you still owe that creditor his money because under 11 USC 523 (a) (3) it was not included in your discharge.

The second thing that has to NOT happen is 2nd) Even in a no-asset case, did you commit Fraud, Embezzlement or Malicious Injury to Person or Property against that creditor. Then if you committed any of those but you left this debt out of the bankruptcy, then the creditor was never barred from filing a non-dischargeability action against you in the bankruptcy court like would normally happen at discharge time because they never knew that a bankruptcy had been filed. Phew long sentence. Basically, at the beginning of the bankruptcy a temporary restraining order prohibits any collection efforts or lawsuits against you, except for suits in the bankruptcy itself for fraud, embezzlement or malicious injury to person or property. At the end of the case, the discharge order is a permanent injunction prohibiting collections and lawsuits against you even in the bankruptcy court for those same types of actions. A discharge does allow secured creditors to collect cars and houses if you stop paying for them.

If the omitted creditor had been listed in the bankruptcy petition and received a notice of your bankruptcy, and nevertheless, didn’t file that lawsuit in the bankruptcy, then at the end of the case, they would have been included in the discharge. How’s that for irony. Most of them won’t bother once they see how low your income is, how few assets you actually have and they might think that suing you in the bankruptcy court to prove you are a fraudster is throwing good money after bad.  But if you left them out of the bankruptcy then, therefore, they can now sue you if they want to. But they would still have to sue you to prove that you did the fraud, embezzlement or malicious injury, that’s not going to be an automatic.

If you’ve just had a bankruptcy and afterwards, if you have no debts, start by going to your bank with a little money, say $300 to $500 or $1000 and ask for a secured credit card. It may take a while to save up, but go ahead and do it. Using it sparingly and then paying it down or off quickly will help your credit scores immensely.

If you can afford to, get two of them, from different banks. Two accounts is much better on your credit reports than only one. However, unless it’s an emergency, don’t buy something unless you have already saved up the money for it first. Here’s a hint: Most things you think are emergencies are not.

In other words: Don’t Buy Stuff You Cannot Afford.

Once you’ve purchased something with your new card, you can pay it off over two or three months that way, because you already have the money saved. Do this and it will improve your credit scores.

Meanwhile, a couple or a few months after the bankruptcy discharge, go to Annual Credit Report and download your credit reports to see what is on them. If there is anything that was included in the bankruptcy that is not showing as “an account included in bankruptcy,” or “bankruptcy” or something like that, then you can ask the credit reports and even the creditor to correct the situation.

If a creditor was left out of your bankruptcy but it pre-dates your bankruptcy, then you can ask them to fix it too by sending a letter explaining the in Re Beezley ruling and that it applies to that creditor.

For specific forms and language to put into those letters, to go The Attorney’s Guide to Credit Repair for easy, fast, guaranteed Credit Repair advice.

And yes, it’s true, I do get a small commission when you buy the Attorney’s Guide to Credit Repair, but you should buy it anyway.

Once you’ve taken the opportunity to clean your credit first, then you can buy a newer car than you would have been able to, and with a more favorable interest rate than you would have been offered. That means that you can buy a better car, a safer car and more a more reliable car.

How I got a huge pile of old student loans off my Experian Report

Want to repair your credit but keep hitting a brick wall?

Did you know that according to the Federal Fair Credit Reporting Act or FCRA,  15 U.S.C. § 1681, when you dispute something on your credit reports such as Experian, Equifax and Transunion, the Credit Reporting Agency you’ve written to must investigate your dispute. That makes sense and is perfectly easy to understand. No problem so far.

However, the code section actually requires that the credit reporting agency, (usually Experian, Equifax and Trans Union) “shall, free of charge, conduct a reasonable reinvestigation” which of course means that you’re in luck, which means that there is even less than no problem so far.

So what if you dispute something and the credit reporting agency investigates the information, and the party who furnished the information to Experian, Equifax or Trans Union reports back to the credit reporting agency that the information is correct? If you believe that it is not correct, then you may send in another dispute of the same information outlining why you believe it is incorrect, and the credit reporting agency must “reinvestigate.”

So, I was trying to buy a house, ages ago, but I had loads of student loans on my credit files listed, in some cases, as many months late because it was shortly after graduating and passing the bar and for a long time I didn’t yet have a job or career to speak of, and so I got into some financial trouble. We did eventually flip a couple of houses and pay off all of my student loans, so I wasn’t a complete loser, but my credit was still shot from it all. And this last house, I didn’t want to flip, I just wanted a good interest rate and couldn’t get it. In retrospect I should have taken the bad interest rate, closed quickly and flipped it anyway.

So, I checked my credit reports and realized that almost all of my old student loans had been listed inaccurately. They were listed as most of them over 120 days late. Hahaha! But I knew better, most of them were over 180 days late. So I sent in a dispute. And month after month, Sallie Mae kept reporting that they were right and I was wrong.

However, at long last, after about six (6) disputes and ten (10) months later, suddenly all of them disappeared all at once from my Experian credit file. I can only guess what happened, either they finally agreed with me, or maybe the person who worked for Sallie Mae verifying information for credit reporting agencies must have been on vacation or maternity leave or died or something.

Credit Repair works, and you don’t have to be an attorney nor hire one in order to get fantastic results! For the proper form of such dispute letters and so so much more, go to the Attorney’s Guide to Credit Repair for fast easy guaranteed results.

Yes, I do get paid a small commission when you buy the Attorney’s Guide, but you should buy it anyway. 

Want to Buy a House, But Ran Into A Wall

Is this the door to your mortgage broker’s office? Or does it feel like it is?

It looks like what a Hufflepuff might expect when trying to sneak into the Gryffindor wing of Hogwarts.

Obtaining a mortgage loan is a tough business, but so worth it, in most cases. When you own your home, yes, it is true that you have to fix the toilets, pay for new screens and fix the cabinet doors when your children use them to swing on. But you also cannot be evicted by a landlord who has decided to sell the property because he’s getting divorced or because his mother died and you’re really her tenant and he was just the property manager.

Of course you have to pay the mortgage or the bank will eventually ask you to leave, but how do you make sure that you have an affordable mortgage payment? One of the easiest things you can do, is to make sure that you have good credit.  Good credit, means low interest rates. Low interest rates mean low monthly mortgage payments. That low monthly house payment is what makes keeping your home possible. You don’t want to be house poor, which means you have a house payment so high that you cannot afford new clothes or car repairs.

Times have been tough, your income is finally what it must be to buy the home that you’ve promised yourself and your family. But times were tough and many of your debts went unpaid when you were out of work, or work was slow, or during the divorce or after the car accident. Whatever it was, while we all understand that times were tough, banks don’t. They never did. Yes, you want a home loan, but if your credit is bad, they have to charge you a high interest rate. The idea is to get their money out of you as fast as they can before you eventually default again.

Maybe it won’t happen, but if your credit score says you’re basically a viking and the raiding parties have been slow lately, then they have to base their interest rates on something. They can’t take your word for it, nor mine. The only objective method is to look at what all of your creditors have been saying about you. Sometimes creditors get the information wrong, sometimes it’s negligence, sometimes a sin of omission, sometimes they just don’t care and you’ve been slandered and libeled and your mortgage broker can’t do anything about it. What then?

Good credit isn’t magic, Harry Potter is going to wave his wand and yell, “Experian Patronis!” at your mortgage broker. You have to do something. You could spend a lot of money and hand it off to an attorney and hope that the wheels of justice grind faster for this attorney than they do for every other attorney in existence. Fat chance. And yes, that’s expensive. Or you can take the matter into your own capable hands and get started now.

If possible, rather than working on cleaning up your credit when you start looking for house, start right now. If you’ve already started looking for a house, just get started right now anyway. It just takes some effort on your part. But the effort is easy enough, affordable and best of all, guaranteed.

The Attorney’s Guide to Credit Repair is your guidebook, your road map and the leader in credit repair. The attorney who created it, Robert Shapiro, has been an absolute leader in credit repair law and practice for years. He has boiled his experience and know-how into this convenient guide. Do it now.

I Refuse To Pay And You Can’t Make Me

Is your financial situation murky and cloudy?

You’re not entirely remedy-less. Under the Fair Debt Collections Practices Act or FDCPA, did you know that a refusal to pay carries the implicit instruction to consumer collection agents to cease and desist all contact with you by telephone? It does. It works the same as the cease and desist notice which is also part of that code.

But many creditors don’t realize that this is so. Rather than sending a cease and desist notice, why not send a refusal to pay? And if you send “I refuse to pay and you can’t make me,” as your refusal, the collectors will probably violate the cease and desist portion of that refusal to pay within only hours or days of receiving the refusal to pay and perhaps do it a couple or even several times.

Under the FDCPA if a creditor violates the cease and desist notice, they can be subject to owing to you, $1000 per violation. In a short time, they might owe you more than you owe them.

According to the code you do have to sue them to get them to pay you, but the least you have is leverage. The fact that they have violated the law can be used to settle out of court. Let’s call it even, more or less. Under the FDCPA you also have an attorney’s fees clause in the code, so that if your collectors won’t settle and you have to sue, then they have to pay your attorney to sue them. This is of course my favorite part of the code.

While you’re doing this, you should also be paying attention to your credit rating. Credit repair isn’t as complicated as many might say. It does take some effort on your part, but you can do it yourself, affordably and quickly. As you repair your credit, you will need a road map, or a guide. Doing it yourself is tricky if you truly try to do it with no help at all. I’ve read the code sections in the Fair Credit Reporting Act and they are on your side. They provide the framework for your successful repair of your credit. However, they don’t tell you how to write the letters or truly explain the content required to be successful.

I wish I could say that I had written the guide you need to use to repair your credit, but at least I can refer you right to it. The Attorney’s Guide to Credit Repair is exactly what you need to effectuate your credit repair. It’s easy, fast, affordable and it works, provided that you do the work.

Yes, I do get paid a commission when you buy the Attorney’s Guide to Credit Repair, and yes, you should buy it.