Do you want a perfect 850 FICO score? Well only 1% of folks have it and it just got more complicated to reach that goal. The new scoring may divide the high scorers from the bottom folks more than ever. Note that currently only about 20% of Americans have a credit score above 800. The biggest change is how your payment history trends to create a “smoothing effect” over time. The effect may be that auto lenders may approve of more applicants. Once in effect, this will help folks who have filed for bankruptcy protection and work hard to build up their credit.
As a Massachusetts bankruptcy lawyer, we help many folks who need to discharge their debts and get a fresh start. Many debts have already gone to collection. The collection law firms in Massachusetts include the Waltham firm Lustig, Glaser & Wilson. We have litigated some cases against that law firm and have always had a professional, albeit oppositional, relationship.
Many of our Brazilian clients have been stung by the actions of TelexFree, an “investment” firm that looks more like a Ponzi scheme. Shut down in Brazil last year, TelexFree has somehow been allowed to collect significant dollars in the United States, much of them from innocent Brazilians in Massachusetts who are simply trying to get ahead in a tough economy. Many may have to file for bankruptcy as they are out tens of thousands of dollars; monies they were counting on to pay their bills. Read more
Many bankruptcy clients have prepaid debit cards to list among their assets. This is not usually a problem as the balance can be exempt from the Trustee. How does this work? In a Chapter 7 personal bankruptcy, you are entitled to certain exemptions: your home, your car, and your personal items, are all exempt up to a certain amount. Your prepaid debit cards are simply one more asset that needs to be evaluated before filing for a fresh start in bankruptcy. Read more
The Consumer Financial Protection Bureau (CFPB), the brainchild of Massachusetts Senator Elizabeth Warren, is working on making mortgages for homeowners more transparent. Following the financial crisis of 2008, the CFPB was established. Notwithstanding lots of opposition by the large banks, the CFPB is working to institute rules and regulations to help consumers. Read more
While Massachusetts bankruptcy filings have gone down, and the answers as to why somewhat unclear, some credit may go to the Card Act, which is saving billions of dollars per year for consumers, and largely low and moderate-income consumers with poor credit.
We have long held that bankruptcy clients should not “feel guilty” because the banks and other lenders have already factored in a percentage of their debts as unable to be paid. Furthermore, a large part of bank profits has been from the backs of those with poor credit, who have paid exorbitant interest rates. Consumers are entitled to a “fresh start” under federal bankruptcy law. Read more
We have written about the Consumer Financial Protection Bureau (CFPB) since it was in the mind’s eye of Elizabeth Warren, the Massachusetts candidate for United States Senate. Ms. Warren, a professor at Harvard Law School, was a consultant to the United States Congress while the Dodd Frank legislation was pending, and was hired by President Obama to implement the legislation and to set up the CFPB. Politics being what they are, she would not be confirmed by the Senate, so she returned to Massachusetts to run for office.
We have been representing clients filing for Massachusetts bankruptcy for over 26 years. For the folks that qualify, even after the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, we regularly get the question: how can I increase my credit after a bankruptcy?
We have a web page entitled Life After Bankruptcy which addresses this issue. The web page outlines the percentages for each part of your credit score.