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Getting into debt is an insidious process. No one sits down and thinks let’s see how much trouble can I get in with MasterCard today. Usually the charges just creep up on us or there is an emergency, many times it can takes place over many years. Most of us get advertisements for credit cards almost daily in the mail. In most cases, all you have to do is sign your name or call a toll free number and the card is yours.

They make it so simple. Before you know it and take inventory, you could own a several credit cards all charged up to the limit. Who is really to blame for getting into debt?

That depends on many conditions. First of all, getting credit in this country is just too easy, although the last few years it has become more difficult. Society is to blame for bombarding us in the media with an image of the ‘‘good life’‘ and encouraging us to ‘‘buy now and pay later’. And, of course, we must take some of the responsibility ourselves for getting caught up in that mentality. The mortgage crisis was due to realtors and banks convincing us we can afford more than we could with low interest rates that balloon in a few years.

There is no economic class that is singled out for getting over its head in debt. If you are in a lower income group, you are in good company if you’ve had to declare bankruptcy. Some of the richest people in the world and some of the most prestigious companies have gone through some form of bankruptcy. You read about them in the newspapers almost every day. Car companies, celebrities, the rich, the poor, people from all walks of life have had to declare bankruptcy.

Very often, getting into debt is a consequence of outside forces and is out of your control. The loss of a job, incurring unexpected medical expenses, a failing business, a myriad of other costs that can crop up in life, can contribute to an awkward situation that you cannot be blamed for. So, don’t fall apart, don’t blame yourself too much. It’s time to pick yourself up, brush yourself off, and get on with your life.




Getting on with your life, however, means that you need to restore your good credit. Even if you’ve vowed to only pay cash for what you can afford from now on, there are certain items you cannot buy with cash. One of the most important purchases in a person’s life is the purchase of a house. It is probably the most expensive purchase a person will make in his or her life. Unfortunately, it is not something you can just save up for and it does require an acceptable credit report. The same thing might be said of a car purchase.

Sure, you could save up for a car a lot easier than for a house, but a car might be necessary for you to get to work. You probably can’t wait the many years it would take to save up enough money to pay cash for a decent car. How can you get on with your life if you can’t purchase two of the most necessary items in life?


In the following pages, we will show you how you might be able to clean up your credit report enough to purchase a new automobile or even a new house. It won’t happen overnight. It will require patience and a meticulous persistence on your part. If you are willing to roll up your sleeves and put forth some sweat, you should be able to make some headway in your quest to clean up your credit rating.

Let’s take a look at what lies ahead of you after declaring bankruptcy, so we know what you will be dealing with. Then, we can attack the problem of cleaning up your credit. In most cases, the ‘‘punishment’‘ for declaring bankruptcy has to endure ten years on your credit report. This is how long a bankruptcy will remain. Personally, I feel this is too strict, especially for a first time offender. If this were a criminal case with someone who might have committed a robbery with a lethal weapon, you would probably only serve a few years in prison. Nevertheless, this is what we must contend with so we have devised a plan to help you get your credit back in much less than ten years.

Depending on the assets you still have, you may be way ahead on the road to better credit. If you own a house, a car, or you still have a major credit card, then you have already begun the process of re- establishing your credit. However, this is only the beginning. There are many steps you have to take along the way to keep the process going.







Let’s start with the obvious. If you do own a house, a car, or a credit card, it is paramount that you make your payments on time or even ahead of time. As I stated, this may sound obvious, but some people get the idea that since their credit is already in ruins, it doesn’t make a difference if the mortgage is a few days late. Nothing could be farther from the truth. Creditors will be looking at what your payment history is after the bankruptcy. By falling behind on your bills, you are demonstrating to them that you still have no financial responsibility and are a bad risk for new credit.


If you still have a credit card, it is a good idea to occasionally use it. Many people who have declared bankruptcy are afraid to use their credit cards for a number of reasons. First of all, they are afraid that the card might be taken away from them. It is true that if you were able to keep a credit card when you filed, the card company might cancel your card, then again, they might not. Actually, there is a good chance they won’t, unless you ask for more credit and they request a credit check on you. In any event, what good is the card to you unless you can use it? It actually can be beneficial to you if you use it and make timely payments. This looks very good on your credit report. If shows that you are still able to keep your credit current. Keep in mind you never want your credit to go abo ve 30% of what you owe. Here is what I mean, if you have a credit card with a 1000.00 limit, never owe more than 300.00 dollars on the card. Your credit score goes down the more you owe, it is called debt to income ratio. Even though you have more credit, the creditors get afraid once you owe more than a certain amount, usually over 3 0% of what you have available. This is very important for re-establishing credit.

You don’t want to charge up a lot of money on the card, but you want to show them that you can be trusted with credit. If the card is a revolving account, don’t pay off the balance all at once. Make timely payments over a couple of months to demonstrate your ability to pay back your loans over time. It shows that you can meet the payments and budget your money properly. Some people fear this will be seen as getting into more debt and discourage potential creditors from giving them credit. Actually, the reverse is true. By charging on your card and then paying off


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In this day and age many people have credit problems and it does not look like it will be getting any better soon. This manual helps you to find new credit and repair the damage to your existing situation. This is mainly a guide in finding credit cards, what not to do so your credit will improve, and how to communicate with the three credit agencies in repairing your credit. The answers to your situation are simple and designed in a way that is easy to understand.

  • ISBN: 9781370975907
  • Author: Ronald Jacobson
  • Published: 2017-04-20 23:50:11
  • Words: 5919