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Filing Bankruptcy: Important Facts
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Many people like yourself have questions about filing bankruptcy. Susan responds to questions about real-life implications of filing bankruptcy, alternatives to filing bankruptcy, and what to do if you already filed.
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About 9 1/2 years ago I filed for Chapter 7 Bankruptcy . My question is how can I get this off my credit history once I hit the 10 year period . Can I hire your services to do this? Please let me know. Thank you.
- Jose Jr. in NYC.
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Dear Jose,
To get the bankruptcy off your credit history, all you have to do is wait. The Fair Credit Reporting Act dictates that a bankruptcy stay on your credit report for up to ten years. When the ten years is up (and yours almost is), the bankruptcy notation should come off the report automatically. To verify that this has been done, you may want to pull a copy of your credit report. MMI recommends that you review a copy of your report annually anyway.
One last note: You never should have to hire anyone to help with credit reporting issues. Be wary of companies that try to sell you credit repair services!
Susan
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Five years ago I declared bankruptcy! You are right about it being the biggest mistake a person can make. Unfortunately, no one explained that to me at the time! Since that time I have purchased nothing on credit. I need a new vehicle and I am tired of paying rent on a home. I could really use some limited credit purchases. Is there a way to obtain some limited credit for these types of items? Could you direct me to a source?
- LKR
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There are plenty of lenders out there that will finance someone with a bankruptcy. A quick search on the Internet will result in hundreds of potential lenders. Keep in mind that lenders make credit decisions based on a number of factors, not just whether or not you’ve filed for bankruptcy.
Because you have not used credit for many years, you may want to begin building a good credit rating by starting small. A secured credit card is easy to obtain and can help you to establish yourself as credit worthy.
Please be aware that you may have to pay high interest rates because of your past credit history. Be sure to read and understand all of the terms and conditions of any new loan.
Good Luck,
Susan
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I am recovering from a past bankruptcy that was released 7/98. Since then I feel I have been punished by having to pay almost 25% for my first post bankruptcy car loan. I traded that car in and got a lower rate which is now almost 17%. It makes it hard to ever get good credit terms... what can I do?
- Mary
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Mary,
I understand your frustration. Bankruptcy has many side effects and unfortunately many consumers do not understand the full impact until it’s too late.
A bankruptcy stays on your credit report for up to ten years and will continue to affect your ability to obtain favorable credit terms until that time. Think of it from a creditor’s perspective. They need to determine what kind of risk they are taking when lending you money. When someone has filed for bankruptcy, they are considered a greater risk and are therefore often charged higher rates.
On the bright side, a bankruptcy’s negative effects will lessen as the bankruptcy ages and you continue to use credit wisely.
Susan
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If I do this program would it be considered bankruptcy?
- Penny
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Dear Penny,
It is not a bankruptcy; it’s an alternative.
A debt repayment plan is a voluntary program for both you and your creditors. MMI serves as a neutral, third party negotiator. The plan allows you to repay your debts—with terms you can live with—without having to file for bankruptcy.
MMI does not report to the credit reporting agencies. Call to get started today.
Susan
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