Category: Consumer Credit Information

Massachusetts Consumers Buying Homes After Bankruptcy or Foreclosure

Our chapter 7 bankruptcy clients often ask how, if ever, they can buy a home after they have filed for federal bankruptcy protection. First of all, we counsel our clients to rebuild credit scores. Second, we address the Fannie Mae rules and regulations. Those rules clearly state that credit histories that includes a bankruptcy “represent a higher credit risk” however, “this does not mean that the borrower’s credit will not be acceptable.” They are looking for current outstanding debt, following the bankruptcy, four years time (absent “extenuating circumstances”), and reestablished credit. The regulations are not hard to comply with for many of our clients.

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Credit Card Default Rate High for Massachusetts Consumers

The number of consumers defaulting on credit card bills is increasing nationwide, and in Massachusetts. According to the official record keepers, the credit card default numbers are up, the rate is up, and the index is the highest since 2004. We are seeing new Massachusetts personal bankruptcy clients who just can’t pay the minimum payments at increased rates. We are also seeing, more and more, credit card companies willing to negotiate a settlement.

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Massachusetts Debtors Can Beat Credit Card Companies In Court

Credit card companies regularly sue debtors when they stop paying the monthly minimums. When our clients owe the money, and have no chance of paying them back, we often recommend Massachusetts personal bankruptcy. Many times, however, that is not a good option: when our client’s income is too high, when our client’s assets are too significant, and, in a recent case we handled in West Roxbury District Court, when our client had filed bankruptcy within the past eight years. For these, and other, reasons, they don’t qualify for bankruptcy.

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Massachusetts Credit Score News for Consumers

Many of our personal bankruptcy clients, now free of their debts, are looking for homes in this market. A problem for home buyers these days is that the FICO score has come to matter more and more following the credit crisis. Fannie Mae and Freddie Mac wont purchase a mortgage from the front line lenders if your credit score is below 620. This is notwithstanding the fact that many bankers will freely admit that the FICO score is not the best predictor of responsibility in consumer lending – home equity and debt to income ratio are far more significant. So is job stability and marketable assets.

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Notes from a Boston Bankruptcy Attorney Before Suzie Goes off to College

Clients often ask their consumer attorney how to teach their college bound kids about credit and finance. At the intersection of when their income is low and needs are high, these enthusiastic young folks need clear instruction on how to manage their financial life. A wonderful approach to dealing with offspring and their finances is in Michael Stopler’s book, Wealth: An Owner’s Manual. The simple approach is to open a bank account which Suzie, or both of you, has access to, have her put her earnings in and you put a monthly, or quarterly, allowance in. The account can have a checking and debit card and Suzie is responsible for managing the account. Another approach is to give Suzie a credit card that you are responsible for.

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Final phase of CARD Act begins August 2010

In February 2010, the second phase of the Credit Card Accountability Responsibility and Disclosure (CARD) Act significantly changed the terms consumers were held to by credit card companies. The CARD Act generally made credit card terms more friendly to consumers, since all credit card companies are now held to the same standards. There is more good news for consumers, especially those consumers who are in the process of rebuilding credit after bankruptcy. The third phase of the CARD Act will come into action in August 2010 and incorporate the following updates: 1. If the borrower makes a payment 60 days late and suffers an increased interest rate, six months of on-time payments will cause the interest rate to return to the original rate.

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Final phase of CARD Act begins August 2010

In February 2010, the second phase of the Credit Card Accountability Responsibility and Disclosure (CARD) Act significantly changed the terms consumers were held to by credit card companies. The CARD Act generally made credit card terms more friendly to consumers, since all credit card companies are now held to the same standards. There is more good news for consumers, especially those consumers who are in the process of rebuilding credit after bankruptcy. The third phase of the CARD Act will come into action in August 2010 and incorporate the following updates: 1. If the borrower makes a payment 60 days late and suffers an increased interest rate, six months of on-time payments will cause the interest rate to return to the original rate.

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Free Credit Scores for Massachusetts Consumers – If Senator Udall Has His Way

Presently, it costs Massachusetts consumers about $15 to secure their credit score; credit reports, on the other hand, are free. However, yesterday the United States Senate passed an amendment to the big financial regulatory bill that would give consumers a free copy of their score whenever they were denied credit, denied the best interest rate or denied employment because of their credit score.

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