Los Angeles Bankruptcy Law Monitor : Los Angeles Bankruptcy Lawyer & Attorney : Christine Wilton Law Firm : Southern California Chapter 13 & Chapter 7 Bankruptcy, Foreclosure

I just returned from a workshop held by Fico Certified Credit Professional Rondi Lambeth, owner of Fortress Credit Pro where I gained some great information I want to pass along to you here. He cleverly coins the name of his workshops as, Fico Score Up Yours!  The negative connotation of sticking it to Fico always makes me giggle.  So, you want to know how to improve your credit score after bankruptcy?  I have great news. If you go to Rondi's website, you can pay $50.00 for him to audit your credit report and point out all the errors. He will tell you himself that you can do this on your own and don't need to hire him, but if you do, he will have you sign a statement that you knew this and requested his services anyway. 

Here's the myth I outlined last year in, Filing Bankruptcy Will Ruin My Credit. Rondi says that he can actually achieve greater results, much faster for those who have filed bankruptcy. Usually in about 90 days you can have good credit again. In many cases, you can even have your bankruptcy removed from your credit report.  What? Read that again.  You can actually have your bankruptcy removed from your credit report! 

Under the Fair Credit Reporting Act, any information provided on your credit report must be accurate, meaning 'freedom from error.' Accurate information means that the creditors must report complete, full and accurate account numbers, which Rondi says, they rarely do. Also, those who have filed bankruptcy will know that their bankruptcy case always ends in two letters, which represent the Judge's initials of the Judge assigned to their case. What this means is that if the Judge's initials are missing, the credit bureau MUST remove this erroneous information all together. What's even better is that once you've filed bankruptcy and received your discharge, your debts must show as discharged on your credit reports.  White v. Experian is our case on point with this issue.

Another nifty trick provided by Rondi was the use of IRS Form 12277 to remove a tax lien from your credit report by simply completing the form and sending it to the IRS with the box marked under Section 8(d) that "withdrawal is in the best interest of the debtor and the government." 

My advice from this article, How To Use Credit Wisely After Bankruptcy on May 17,2010 still holds merit, but with Rondi Lambeth in your corner, helping you to clear the errors from your credit report and improving your score will put you back on the right path of financial freedom while being fiscally responsible with your money.  Not to mention that with great credit comes the better job, and rewards programs and discounts only offered to those with the best credit. Now that's a Winning Formula!

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A bankruptcy will remain on your credit report for up to ten (10) years. However, the perceived hit to your credit is an illusion that your creditors don’t want you know about. You see, if you’re already experiencing wide spread defaults on your bills, or even your mortgage, then your credit score has already been adversely affected. 

In fact, not taking any action toward resolving your money problems will cause significant and long-term damage to your credit score. Late payments and defaults will stay on your credit report for up to seven (7) years and if those debts are not discharged or paid, they can haunt you for all eternity. The biggest hit to your credit score is unpaid debts; not a bankruptcy.

Filing bankruptcy will eliminate old debts and completely clear your credit report of all debts, period. This fresh start by filing bankruptcy, cleans the slate and can actually cause your credit score to go up. Yes, I said that your credit score will likely increase after bankruptcy. Your creditors don’t want you to know this and they will do everything they can to get you to pay them as much as possible.

The folks over at the National Bankruptcy Forum agree, according to their recent blog article entitled, “Has the Biggest Reason Not to File Bankruptcy Already Happened to You?” This article points to the fact that being late, or failing to pay your debts has more of a negative impact on your credit score than filing bankruptcy. Why continue to suffer and throw good money after bad? If you are considering bankruptcy, call your local bankruptcy lawyer today.

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I always tell my clients that your credit score only tells you one thing; how well you manage DEBT.  So, why would you want to go back into debt again after bankruptcy?  After all, don't you just want to enjoy the feeling of financial freedom from debt for as long as possible?  My first inclination would be  to strongly discourage you from ever getting into debt again, but I know you're an adult and you can do with your life and money as you please.  So, here are some suggestions I found from the folks over at the National Consumer Law Center on Using Credit Wisely After Bankruptcy. 

Lower interest rates. Just because you've filed bankruptcy; it doesn't mean that you will forever be stuck with high interest rate offers on credit.  In fact, I strongly encourage you to avoid those high cost, high interest rate predatory type lenders.  Run, don't walk away from anyone advertising, "Bad Credit?; No Credit? Bankruptcy? No Problem!"  You're guaranteed to get a loan from these lenders, but it will cost you more than it did to file bankruptcy in the first place.  Don't get pressured into signing any contract that you don't understand, or that cost too much just for the credit. 

Here's the deal.  You've worked hard to take responsibility for your financial well-being and now have your bankruptcy discharge.  You'll be able to get credit again and on good terms too, but don't you want better than that for yourself and your family?

Savings accounts.  Instead of debt and credit, consider setting money aside every month in a savings account to save for big ticket items.  Remember layaway?  Be your own lender and save money to buy what you want.  Chances are, if you have the cash in your account and actually have the money to buy that flat screen TV, it will be much harder to part with that cash than it would be to put it on a credit card and pay 29% interest.  There is a dysfunctional psychology to that.  So, if you can't afford it, save your money and pay cash instead.

Shop around.  Rich people do this all the time.  Shop around for services you need and use all the time, like groceries, phone service, insurance, etc. 

Ask for discounts.  I have found that negotiating and asking for discounts on things really makes a difference.  Here's a story:  I was at a do-it-yourself-store a few weeks back.  My boyfriend and I were shopping for area rugs for our living room.  We found one we could both agree on, but the only one left was the hanging sample.  It was in otherwise perfect condition hanging on the display clamps.  So, I told the representative that I would like for him to roll it up, give me a discount and send me on my way with the rug.  Now, mind you, they were already on sale and I was asking for an even greater marked down price.  He went to talk to his manager and brought back a hand written ticket and had taken another $50.00 off the price!  I am telling you that asking for a discount works. 

Read before you sign.  Don't be embarrassed because you don't understand a complex financial document.  You're not a lawyer.  Hey, I know some lawyers that don't understand complex financial products.  Remember that when you sign a legal document and enter into a contract, you're agreeing to what is in that document whether you read it, or understood it.  Be a well informed consumer.  If you don't understand the contract; don't sign it.  Just because something is being sold in the marketplace does not make it a good idea. 

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