Modesto Bankruptcy Lawyer Blog

With only days away from Christmas, retailers have ramped up their efforts to get shoppers into their stores either for the first time this holiday season or to get them back in for more shopping bliss..

But, it's also been a time where credit card companies have been clamoring to get consumers to sign up for their plastic, offering "perks," "rewards" and "cash back" plans that may end up being more trouble than it's worth for consumers who do not handle credit well..

While the marketing campaigns make it seem so simple to get bonuses, in reality they can be tough to earn or qualify for. In many cases, as Modesto bankruptcy lawyers have seen, people have to spend a certain amount every month, pay off what is owed in a short period or jump through other hoops to get the perks. It's not as simple as receiving the card in the mail, using it and automatically getting money in your pocket. These companies are smart -- they're not giving away any money without making much more.

Credit cards are a necessary evil. Most Americans have at least one and most people have several. In the minority are adults who have no cards and rely on a cash and check system of living. And that's what these cards want because the more we use them, the more in debt we become.

That's where bankruptcy in Modesto comes into play. Many people have fallen for far too many lines of credit, leading them down a path of debt and sometimes financial ruination. These consumers at some point may figure out that late fees, withdrawal transaction fees, and spikes in interest rates can lead them to continually be stuck in debt.

Filing for bankruptcy wipes clean that debt and allows people to live a life without the pressures of creditors and debt collection agencies. There are two chapters of bankruptcy and both are designed with consumers in mind.

According to a recent article by Moneyrates.com, the credit card companies have been putting on a full-court press to lock up as many consumers as possible. They are shooting television commercials with high-priced celebrities, doing mailings and increasing Internet advertising to lure in consumers.

Here are some examples of recent "deals" the companies have been using:

• American Express offered 20 percent discounts when making purchases on Nov. 26 from certain businesses.


• Bank of America pays 2 percent cash back on groceries, 3 percent on gas up to $1,500 every three months. Its Upromise card offers 11 percent cash back for college when shopping through Upromise.com.


• Chase and Citibank are both paying new credit card holders $200 after they put $500 on their card.


• Capital One has a card that offers 1 percent cash back on day-to-day shopping and a 50 percent bonus on earned cash on top of a one-time $100 bonus.


• Discover offers a card with 0 percent interest for 15 months and you get 5 percent back on up to $300 spent.

While the flashy perks may be enticing, don't forget the basics. Read the fine print, find out what the interest rate will be after the introductory rates wear off and do your research. As stated earlier, credit card companies aren't in business to give away money. It's unlikely a consumer can profit from their credit card, so all the promises of perks and cash back are likely just a show. Proceed with caution.

Continue reading "Modesto Holiday Shopping Season in Full Swing; Credit Card Companies Profit Big Time" »

Finally some good news on the economy.

CNNMoney reports that in November, the unemployment rate dropped to 8.6 percent, the lowest rate since March 2009. In that month, a net of 120,000 jobs were created.

For many people in Modesto, while finding work is a great thing, a long time without a job has them in major debt. With few alternatives, many people have used credit cards to get by but are not getting ahead in paying off the debt. By making minimum payments or no payments, the consumer is put in a bad position.

This is when fees and high interest rates kick in, and companies continue to look for ways to keep consumers in debt with them. But for many, they have broken free from that downward spiral by considering bankruptcy in Modesto.

Credit card companies have used advertising campaigns and other means to make Americans believe that bankruptcy is a bad thing. That's because for them, it is bad. For consumers, it's good. Our Modesto bankruptcy lawyers know that consumers can benefit from these consumers laws.

Rather than toil in frustration, stress and debt, a consumer can shed the debt that has caused their life to be difficult and at the same time, shield themselves from creditors who are harassing them.

But for many, the new numbers mean they may be able to break free from that cycle. According to the CNN report, the decline in unemployment was better than some experts predicted. Some believed there would be about 110,000 jobs added. While the private sector added 140,000 jobs, government cut 20,000 jobs.

The jump in jobs is noticeable, though. In September and October combined, only 72,000 jobs were added. A majority of the November hires, not surprisingly, were in retail -- 50,000 and another 22,000 jobs in hospitality, like restaurants and hotels. But the U.S. Department of Labor reported that it adjusts its numbers to take into consideration seasonal trends.

Still, there is room for improvement. There are 13.3 million people who are unemployed and less than 1/3 of the 8.8 million jobs that have been lost in recent years have been recovered. Nearly half -- 43 percent -- of people looking for work have been doing so for more than six months.

This shows that many more people are still struggling. While the news is encouraging, it's only a start. For people who are still looking for work, they may have come to a point where there simply do not have any source of funds to pay their debts. They have sold assets, cut back on their lifestyle and still searched for work unsuccessfully. The bills have piled up and there is no way to pay.

For these people, filing for bankruptcy could be beneficial. Rather than dealing with creditors who call you every day, filing immediately stops them from calling. Most important, bankruptcy clears your debt and can also save your house from foreclosure in Modesto. If you are in a position of considering bankruptcy, set up a free consultation with a skilled Modesto bankruptcy lawyer today.

Continue reading "Jobs in Modesto Up in November, But Many Still Seeking Bankruptcy Protection" »

By now you must have heard that stores are not only opening at midnight Friday, but some are even opening Thursday night to try to get a jump start on the competition.

Critics argue that by opening on Thanksgiving Day, the retailers are infringing on a holiday meant to be spent with family. Supporters say that many people incorporate shopping into their Thanksgiving holiday plans, so the earlier the better. Regardless, retailers are expecting huge numbers of shoppers Friday as the holiday shopping season is in full swing.

While many will be enticed to line up overnight or get a pre-dawn start Friday, a free-spending attitude can lead to major debt problems. The only winners in the holiday shopping season are the retailers and the credit card companies. If you've watched TV lately, you've noticed the increase in credit card advertisements. They are making a push to get people to use their cards. That's because they know people will overspend and their hidden fees and high interest rates will make them money, too.

Consumers must be careful because these predatory lending practices can cause people to have to consider bankruptcy in Modesto. For those who end up with thousands of dollars in unsecured debt such as credit card debt, bankruptcy may be the only way out.

Creditors are rarely willing to work with consumers to pay down debt. They would rather have it all. But filing for bankruptcy scares them because they know they could end up with very little. Hiring an experienced Modesto bankruptcy lawyer should be your first step if you've run into problems meeting debt obligations.

Bankruptcy is a complex process, but it can be extremely beneficial to those who use these laws to their advantage. For one, a person can clear up most or all of their debt by filing for bankruptcy. Under Chapter 7 bankruptcy in Modesto, a person can have unsecured debts cleared while possibly keeping all of their assets or having to give up a few in order to pay back some of the debt. Chapter 7 is designed for people who have little or no income.

Chapter 13 bankruptcy, however, allows people to keep their assets if they can make monthly payments over 3 to 5 years to pay back a portion of the debt. This is the least popular form of bankruptcy, but can help people who want to stay in their houses and keep their cars and other assets.

Either option may be appropriate, especially when shopping debt reaches high levels. The National Retail Federation estimates that 152 million people are expected to shop during the Black Friday weekend, a 10 percent jump from last year.

However, the organization is typically low on its estimates. Last year, it estimated 138 million shoppers and 212 million showed up to look for sales. Target, Best Buy, Kohl's and Macy's have all said they're opening at midnight Friday. Wal-Mart and Toys R Us have said they'll be open at 10 p.m. and 9 p.m., respectively, on Thursday.

Continue reading "Black Friday is Good for Retailers, Bad For Modesto Consumers Who Get Trapped in Debt" »

If an idea by several U.S. Senators and U.S. Representatives turns into law, those considering bankruptcy in Modesto with tens or hundreds of thousands of dollars in student loans may soon be able to shave off the debt.

A Modesto Bankruptcy Attorney should be consulted by those who have a great deal of student loans. While these loans are often not subject to dishcarge, there are a number of ways bankruptcy can hel. With jobs scarce right now and the economic recovery slow, bankruptcy may be a good option for those who qualify.

According to a recent article published by U.S. News & World Report, three Democratic senators and four Democratic representatives introduced parallel bills that would allow people with burdening student loans to be relieved of that debt through the bankruptcy process. One of the sponsors is George Miller, whose district includes an area northwest of Modesto.

The bills would reverse a law change that went into effect in 2005, which made student loans ineligible for bankruptcy relief, unless the person is physically unable to work to pay them off and the loans are an undue burden.

The bill comes on the heels of a student by the John. J. Heldrich Center for Workforce Development at Rutgers University, which found that 56 percent of 2010 graduates were unable to find work. That number is down significantly from the classes of 2008 and 2009. A recent New York Times article stated that student loan debt outpaced credit card debt for the first time last year and is likely to top $1 trillion this year.

"Before changes were made to the bankruptcy code in 2005, only government issued or guaranteed student loans were protected during bankruptcy, said Sen. Dick Durbin, D-Ill. in a press release. "This protection has been in place since 1978 and was intended to safeguard federal investments in higher education. Today's bill would restore the bankruptcy law, as it pertains to private student loans, to the language that was in place before 2005, so that privately issued student loans will once again be dischargeable in bankruptcy."

With the economy slow to recover after the Great Recession, many recent-grads are struggling to find work, or are having to look to other areas outside of their field of study simply to be getting a paycheck. Coupled with having to live off of credit cards to get by in the mean time, many people are stuck in a tough spot.

Even if they've recently found work, they may have piles of credit card debt on top of student loan debt, making for a difficult time financially. If these bills become laws, many people who are struggling to get by and are considering bankruptcy in Modesto and throughout California will be significantly aided in the process. The bill has the backing of several educational organizations, the article states.

Continue reading "Congress Proposes Law That Would Allow Student Loans To Be Included in Modesto Bankruptcies" »

The Sacramento Bee recently chronicled the experiences of two couples struggling with credit card debt. Both couples used a debt solutions company and took more than five years to pay off their debts. Evaluating your options is recommended before you sign on with any agency claiming to make you debt-free.

Contacting a bankruptcy lawyer in Modesto could have given these couples a fresh start much sooner.

Most people think of bankruptcy as something to be ashamed of, but it's not. Consumers that have fallen on hard times because of medical bills, real estate debt and credit card debt deserve a new start. An experienced bankruptcy lawyer can explain the two types of bankruptcy options a consumer has. One can wipe out most of your debts immediately so you can start anew. Credit counseling, which won't save your credit rating, is another option. Your credit report will show late payments that will stay on the report for years. This will greatly affect your ability to obtain loans.

The state Department of Corporations keeps on eye on the credit counseling agencies in California.

Here are some cautionary tips and red flags regarding credit counseling agencies:

-Considerable upfront fees - most places charge you a set-up fee and then add on additional fees.

-Misplaced or diverted payments - some companies won't tell you your first month's payments are actually fees. So your money going to the credit counseling company and not your creditors. Missed payments mean bad marks on your credit report, which will last for years.

-Idealistic promises - no company will wipe out your debt for free without damaging your credit rating. Supervised payment plans involve systematically paying off your loans.

-No accreditation - agencies that aren't accredited by the National Foundation for Credit Counseling and/or Association of Independent Consumer Credit Counseling Agencies should be avoided. Accredited credit counseling agencies meet minimum standards for free or low-cost confidential services.

Bankruptcy laws give legal protection that most other debt-relief options don't; personal bankruptcy shouldn't be viewed as a last resort, but as a new beginning. Your own situation will determine if bankruptcy is the right choice for you. Let an experienced bankruptcy lawyer assess your financial needs and explain your options.

Continue reading "Those Considering Debt Solution Agency should speak with Modesto Bankruptcy Attorney " »

A new lawsuit, filed in a California federal court seeking class action status, accuses credit score company Experian of falsely marketing its credit report and credit monitoring services.

The Red Tape Chronicles reports that California consumers are often being defrauded in their search for a credit report. The suit accuses Experian of intentionally confusing costumers through false advertising and failure to provide customers with the service they pay for. Experian operates the popular sites FreeCreditReport.com and FreeCreditScore.com.

"It's a classic consumer fraud case," said David Woodward, one of the lawyers who filed the case. "The law is designed to prohibit exactly this kind of egregious advertising practice. ... The defendant is profiting from deception."

A Modesto bankruptcy lawyer should be quick to inform you that many aspects can affect your credit score: credit cards, bad debt, medical bills, foreclosures. By law, you are allowed one free report from each credit report agency each year. As freecreditreport.com is not a bad service for those who are trying to rehab their credit, it is also not a necessary service.

Late payments have trashed the credit ratings of most consumers by the time they seek bankruptcy protection. In many cases, they may also have been preyed upon by credit counseling or debt management services. Consulting a bankruptcy attorney is the best course of action for getting your financial house in order.

Credit report companies, including TransUnion, Equifax and Experian, are producing credit scores with the formula from FICO. Those scores are then reported to lenders. The federal suit, filed against Experian, accuses the company of fraud because the Experian PLUS score is not the same score shown to lenders.

The Federal Foundation for Credit Counseling offers answers to some FAQ's about bankruptcy and debt:

-Can I be terminated from my job for filing for bankruptcy? The Bankruptcy Code typically prohibits termination, or discrimination, because an employee has not paid a discharged debt, filed a bankruptcy case or has been insolvent before the case was filed.

-Is professional credit counseling for me and worthwhile? If your credit is going down the tubes and you're looking to try and solve the problem, then professional credit counseling could be for you. Professional credit counselors can offer you knowledgeable advice on how to repair your credit. They can also provide you with help because they are familiar with what kinds of habits and patterns to look for in a suffering client. However, you may also expose yourself to predatory companies that charge high fees for "counseling services." And if your overall problem is an insurmountable level of debt, these agencies may not be able to help you get your financial house in order.

-Am I able to keep my credit cards after filing for bankruptcy? Typically no, unless you don't file bankruptcy on a given card. Then you may keep the card -- however the company may close the account anyway. Typically, clients are able to reestablish a good payment history through secured and non-secured credit cards within a few years.

-Will I need to hire an attorney to file for bankruptcy? While you are not required to be represented by an attorney, is it highly recommended as they can provide you with advice to help you understand your rights and the consequences of your bankruptcy case.

Continue reading "Credit Report Lawsuit Illustrates Risk of Predatory Services when Dealing with Bankruptcy in Modesto" »

Nearly 2 million Californians currently face the threat of debilitating family health care expenses caused from head injuries, car accidents, sport-related injuries, and other unexpected injuries and illnesses, according to Families USA.

Modesto bankruptcy lawyers encourage you to educate yourself about The Affordable Care Act and its attempt to put a cap on out-of-pocket expenses for California residents. It is important to protect both your health and your finances when facing these unexpected life emergencies. Medical bills are one of the leading causes of bankruptcy in Modesto and throughout California.

Once the spending limit is put into action in 2014, The Los Angeles Times reports, "Insurance companies will have to pick up the tab for essential medical services -- including the costs for doctors, hospitals, prescription drugs and emergency care -- after consumers pay their share."

Many Modesto residents find that managing financial debt resulting from medical bills can be exhausting, if not impossible:

-Last year, in the Eastern District of California, 54,365 sought bankruptcy protection.

-Nationwide, about 1 in every 3,000 people sought bankruptcy protection.

The Affordable Care Act plans to keep the out-of-pocket spending limit under $6,000 for individuals and under $12,000 for families.

A complete list of what Californians should know about The Affordable Care Act is provided by the California Health Care Foundation on their website.

Mortgage debt, insurmountable, credit debt, foreclosure, and unemployment can all be contributing factors to, if not main causes, for bankruptcy. Here is a list of 66 ways you can save cash to help alleviate your debt.

Yet too often even the most rigorous debt reduction plans are not enough to alleviate the stress of high debt levels and bill collectors. In such cases, bankruptcy can offer families a fresh start.

Continue reading "Affordable Care Act May Help Modesto Families Avoid Bankruptcy" »

California officials scramble to move larger boats out of local marinas to keep them from being damaged from waves created by the 9.0 magnitude earthquake that hit the northeastern coast of Japan. Japan's recent natural disaster left millions of residents homeless and with nothing, after having experienced the latest tsunami with no warning and no preparation.

Modesto bankruptcy lawyers recommend California residents prepare themselves for natural disasters as we are vulnerable to the same type of events.

The effects of the earthquake in Japan have made its way to the California coast and have already caused at least $50 million in damages; that number is expected to increase, reports KY3.

Geology professor and director of the Humboldt Earthquake Education Center at Humboldt State, Lori Dengler, said, "This is an expensive event for California."

The Los Angeles Times reports that there are two types of tsunami threats in California caused by earthquakes: Ones that happen far away, as the one in Japan, and ones that occur closer to home and provide less time to prepare.

The California Earthquake Authority (CEA) asks if earthquake insurance is right for Modesto residents? The CEA recently upped its dwelling coverage to $100,000 with additional living expenses and as much as $15,000 in Loss of Use coverage. A total Guide to Earthquake Insurance for California homeowners is provided in this brochure.

While great strides have been made in the research of the earthquake and tsunami link, much has yet to be learned about how to motivate people in threatened areas to better prepare themselves for the possibly devastating results.

While no amount of planning can completely protect you from a natural disaster, the failure to plan ahead and ensure proper insurance can quickly lead to you and your family to bankruptcy in Modesto.

Continue reading "Japan Earthquake, California Fallout, Illustrates need for Adequate Insurance, Bankruptcy Protection" »

On April 1, 2010, the NUMMI (New United Motor Manufacturing Inc.) auto assembly plant in Fremont, CA shut it doors for good, leaving more than 4,700 employees jobless. It was the last auto plant in the entire state of California, producing more than 8 million Toyota vehicles during its 25 years of operation.

Some of the workers cried as they left for the day, while many worried about their futures. While most workers received an average severance package of around $21,000, instability in the auto manufacturing market has many worried that they'll have to declare bankruptcy in order to deal with mounting bills, the loss of health insurance and the lack of jobs within the state.

Will Filing for Bankruptcy Harm Chances for Future Employment?
Trying to get a job after filing for bankruptcy is often a concern for many people. However, bankruptcy doesn't have to hinder your chances at a job if you're upfront about your history. When you apply for any position, be honest about your bankruptcy. Explain the circumstances why you had to file and be sure to highlight your stellar credit behavior since you've filed.

Most employers check your credit history simply to make sure you're not a person who is gravely irresponsible with money or someone who would be prone to company theft or mismanagement. Although Section 525 of the U.S. Bankruptcy Code stipulates that employers cannot discriminate against you simply because you've filed for bankruptcy, it can happen if you're not clear with potential employers about your history.

At the end of the day, recent economic hard times have caused a lot of people to turn to bankruptcy, so it just doesn't mean as much to certain employers as it once did. As long as you're forthcoming and capable in your interview, bankruptcy shouldn't stop you from getting most jobs for which you're qualified.

The Federal Trade Commission has published a list of recent credit-fixing scams and fraudulent credit repair companies that are being pursued by the FTC for unlawful actions. Sadly, there are many more companies operating who have yet to be caught. In order to prevent being taken by credit rebuilding scams, Credit.com suggests that consumers take credit matters into their own hands instead of risking losing money and time with scams.

Reputable Ways to Clean Up Your Credit
- Contact the National Foundation for Credit Counseling (NFCC) to find a registered credit counseling member in your area. The NFCC is a non-profit organization that provides referrals to legitimate agencies.
- In Part One of this entry, we talked about contacting the credit bureaus (i.e. Equifax, TransUnion or Experian) to remove mistakes on your credit. This is your biggest tool in cleaning up your credit quickly. It's a good idea to also set up a fraud alert through your bank or another authorized agency that immediately spots Identity Theft on your records to prevent future dings to your wallet and your credit.
- If you've already filed for bankruptcy, the fastest way to rebuild your credit is to secure loans and credit in your name. Installment loans like auto loans and student loans are ideal, but revolving credit accounts such as credit cards or home equity lines of credit can also be very helpful in rebuilding credit.

Don't trust agencies that require upfront fees or tell you that you should not contact a credit reporting bureau on your own. These companies are likely scammers looking to take your money and access your credit report to manipulate your credit to their benefit and your detriment.

Truly, only a bankruptcy lawyer in Modesto can help you file bankruptcy and clean up your credit history through legal means. Other companies who offer to remove accurate records, such as late or missed payments, are often fraudulent and should be avoided at all costs.

There are plenty of constructive ways to rebuild your credit after you've filed for bankruptcy in Modesto. You can apply for secured credit cards and loans or you can "piggybank" on another authorized credit account to show creditors that you can make responsible financial decisions. However, there are unscrupulous companies out there looking to make quick money by taking advantage of people who are looking to rebuild their credit fast.

You need a good credit rating in order to get a car, a home or even a job, so many people are anxious to raise their FICO score immediately after filling for bankruptcy. They are drawn in by ads claiming to "fix credit fast" or "boost your credit score overnight." However, many of these claims are unsubstantiated or simply completely false. According to Fraud.org, a consumer resource website, here are some common scams people fall for when trying to rebuild their credit:

Paying for "credit repair services" upfront. It's actually illegal for a company to ask for payment prior to performing credit repair services.

Believing that a company can eliminate late/missed payments or charge-offs from your credit history. NO company can legally remove negative credit information if it is accurate, not even for a fee.

Promises to create a second credit history. This is strictly illegal in every way. Anyone offering a secondary credit score using a tax ID number or social security number other than your own is fraudulent.

If you want to clean up your credit fast, regardless of whether you've filed for bankruptcy or not, you can correct your credit report yourself. You don't need to hire a company to take off blemishes for you. All you have to do is obtain a free credit report (the government mandates that this be available for every American once a year), identify the mistakes in your credit history and contact each related creditor personally to have them removed when possible.

Most people suffer with bad credit because they simply don't know that they have mistakes on their credit histories. Check your credit score annually (at least) and take care of problems as soon as you notice them. If you want legitimate answers to your financial questions about credit and bankruptcy, contact a qualified lawyer you can trust.

Many people are under the misconception that you can't qualify for a car loan after you file for bankruptcy because you don't have good credit. In many cases, the opposite is true. Some people file for Chapter 7 or Chapter 13 bankruptcy and are able to buy a car within the same month because their credit actually improved after their debts had been cleared or renegotiated.

How is this possible? Filing for bankruptcy signals two things to creditors. First, it tells them that you've taken significant action to stop racking up debt that you cannot pay. Second, it tells creditors that your debts have been cleared (Chapter 7) or they're being paid down via an affordable payment plan (Chapter 13). Either way, you more than likely have access to more disposable income than you did prior to filing for bankruptcy, which can make you an attractive candidate for a car loan.

Sure, you can expect higher interest rates than people with higher credit scores and without bankruptcy on their records, but it's not impossible to get an auto loan soon after you file for bankruptcy. Typical APRs for post-bankruptcy auto loans are in the double digits, sometimes as high as 20% or more. However, after making regular payments for six to 24 months, this rate can drop dramatically and improve your credit rating along the way. You can also look into refinancing your loan if your original lender isn't decreasing your rate over time as much as you'd like.

If you can, make a big down payment on the car (20-30%) and choose a loan that doesn't have a prepayment penalty in case you decide to pay the car off early or refinance for a better rate down the line. If you need help reorganizing or eliminating your debt, contact a qualified bankruptcy lawyer.

TIPS ON BUILDING CREDIT AFTER BANKRUPTCY:

In Part One, we discussed how a large down payment, installment credit and revolving credit could help you obtain a Modesto home mortgage shortly after bankruptcy. This article will focus on specific steps you can take to rebuild your credit to shorten the length of time you have to wait to get approved for a mortgage loan if you don't immediately qualify for one.

First, obtain a secured credit card. You will likely have a small credit limit ($500 or less) and you may even have to put down a deposit equal to the amount of your credit limit. With secured lines of credit, it's important to be wary of several factors so that you don't get hit with hidden fees and tricky terms. Look for cards with no application fees and low annual fees. Make sure the company offering the card regularly reports to all three major credit bureaus: Equifax, Experian and TransUnion. Otherwise, the account will have no affect on your credit score. Also, be sure that the secured card you choose converts to an unsecured card after 12 to 18 months of timely payments. Good behavior should be rewarded and this will reflect positively on your credit.

Second, if you can qualify for a secured line of credit, start a new account and charge small amounts that you pay off within 30 days. Never charge more than 30% of your credit limit and don't carry a balance. Contrary to what you might believe, carrying a high balance or maxing out your card is not a good thing, says Liz Pulliam Weston of MSN Money.

Third, check your credit report frequently and clear up any blemishes as quickly as possible. All accounts discharged by your bankruptcy should be marked as "included in bankruptcy." If not, contact creditors to make the adjustments. You can also ask them to remove records altogether. After you've got your credit score in the lender-friendly range, you will likely qualify for several types of mortgages at varying interest rates. If you need assistance with bankruptcy recovery or filing, contact an experienced Modesto lawyer.

Even after filing for bankruptcy, obtaining a mortgage on a home in Modesto may be easier than you think. Bankruptcy not only discharges your debt (or creates a reasonable payment plan to eliminate debt in a few years), it also signals to creditors that you've taken a big step in an effort to resolve credit blemishes and make a fresh start. And, under Federal law, you can't file for Chapter 7 bankruptcy again for another eight years, so you're actually less of a risk than other people who haven't yet filed for bankruptcy.

How Quickly Can I Get a Mortgage After I File?
Some people can get approved for traditional mortgages (albeit with high interest rates) as soon as the day after they file for bankruptcy. If you don't qualify for a traditional loan, you may qualify for an income-based FHA (Federal Housing Administration) loan through the government. If you don't qualify for either, you might need to work on your credit for six months to two years before obtaining a mortgage.

One way to ensure an immediate mortgage approval, though, is with a large down payment of 15% to 20% of the home's purchase price. This shows enough good faith that most lenders will jump at the chance to loan you the rest of the money, regardless of recent bankruptcy. Your interest rate will be higher than someone with stellar credit, but you can get approved.

For those who don't have access to this amount of cash, the biggest determining factor of your eligibility will be your credit score. Filing for bankruptcy will no doubt have an effect on your score, but there are ways to boost it back up quickly. Installment loans (auto loans, student loans and mortgages) are instant credit helpers, although you can expect higher interest rates across the board. Revolving credit options like secured or unsecured credit cards or home equity lines of credit can be more accessible tools for rebuilding your credit score as well.

In Part Two, we'll take a look at specific actions you can take to repair your credit quickly to secure a home mortgage. If you have questions about your particular situation and want to get individual advice, contact a bankruptcy lawyer in Modesto to help you devise a strategic financial plan.

After filing for bankruptcy, a strategically designed financial recovery plan can help you get back on the road to financial freedom. Sure, there are many companies out there promising to rebuild your credit overnight and give you a magically high credit score, but the only true (and legal) way to boost your credit score is with hard work, diligence and a smart financial plan devised with an experienced bankruptcy lawyer. Here are steps you can take to raise your FICO score:

1. If you know you're about to file for bankruptcy, pay off at least one of your low interest rate credit cards. If your creditor allows you to keep the card(s) after you file for bankruptcy, you'll have positive activity on your credit report, right from the start. Additionally, you can keep your previous line(s) of credit to help you rebuild your FICO score.

2. Contact all creditors to see if they are willing to remove their zeroed-out balances from your credit report, as opposed to leaving them notated as charge-offs. This will help you decrease the number of blemishes to raise your score faster. Target high-interest credit cards first.

3. Only spend what you have the cash to afford. Although it may seem obvious, poor choices in credit card spending likely got you in over your head in the first place. Don't make that same mistake twice. Use your credit cards to regain a positive credit history, but immediately pay them off, even before your bill arrives, to avoid slip ups. You may even be required to put cash down on new accounts as collateral.

4. Sign up as an authorized user on a third-party's credit card. This could be a friend or family member's card. Even if you don't make any purchases, the credit bureaus will reflect this as positive credit history.

5. Check your credit report often to clear up any errors immediately. You are entitled to a free credit report annually under Federal law, but you might want to invest in a program that allows you to check it more frequently for a monthly fee.