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Credit Repair and Credit Report Problems

Southern California Bankruptcy Discharge Attorney

Credit Repair And Credit Report Problems

At the Law Offices Of Hagen & Hagen, we help clients throughout the Los Angeles area discharge debt obligations through bankruptcy. We provide guidance, referrals and suggestions so that you can be proactive in rehabilitating your bad credit.

Contact us today to learn about various bankruptcy options.

Filing Bankruptcy Will Not Prevent Future Borrowing

When lenders decide whether to lend to a borrower in an asset-based purchase context, they typically take three things into consideration:

1. The proposed loan-to-value ratio (the amount and percentage the borrower proposes to put down toward the purchase price);
2. The proposed income ratio (the percentage of the borrower's monthly income that the new loan obligation will consume);
3. The borrower's credit.

Some lenders will reject a loan application based solely on the presence of a recent bankruptcy filing. Other lenders will consider the loan but will demand a higher rate of interest to compensate for the perceived increased risk. Still others will virtually disregard a prior bankruptcy filing. What matters most is your income and amount of debt. The higher your income and the lower the amount of debts, the less the lender will depend upon your credit.

Make Sure Your Credit Report Is Accurate

Upon being advised of your bankruptcy filing, credit reporting bureaus - such as Experian, Trans-Union and Equifax - and underlying creditors should update your credit report to reflect that the late or charged-off accounts are slated for discharge or have been discharged. Unfortunately, this does not always happen. Too often, a debtor will find, two or three years after filing bankruptcy, that several creditors are not reporting their account as discharged.

Rehabilitate Your Credit

A Chapter 7 bankruptcy generally remains on a debtor's credit report for ten years. A Chapter 13 bankruptcy will remain on a debtor's credit report for seven years. A plan of attack for credit rehabilitation following bankruptcy will require:

  • Avoiding further credit reversals, such as foreclosures, repossessions, judgments, evictions, and tax liens;
  • Consistently paying home mortgages, auto loans and leases, equipment loans and leases, and other financial obligations.

Another way to help repair credit damage and to have a credit card for such things as airfare, hotels, car rentals and emergencies, is to obtain a secured credit card. In a secured credit card account, you deposit a certain sum, such as $500, and the institution gives you a $500 credit line. If you make payments each month and the institution recognizes you as a worthy credit risk, it will eventually return the deposit to you and make the account a true credit card. It may also increase your credit limit without demanding additional deposit funds.

Although credit repair after bankruptcy is usually effective in removing derogatory references by individual creditors, it is usually ineffective in removing from a credit report public record items such as filing bankruptcy, judgments and tax liens.

Contact Our Law Firm

For more information about how bankruptcy helps achieve debt relief, contact the Law Offices Of Hagen & Hagen today to arrange your initial consultation. We do not offer credit counseling.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.