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Steps To Take Before, During, and After a Bankruptcy To Reduce The Impact On Your Credit

Posted on Friday, April 17th, 2015 at 4:42 pm    

credit-scoreMany people wonder how they can protect their credit during a bankruptcy. There are actually several steps you can take before, during, and after a bankruptcy to help reduce the bankruptcy’s impact on your credit to the greatest extent possible. The Fort Mitchell, Kentucky offices of Lawrence & Associates can help you find ways to mitigate credit damage based on your particular circumstances. In the meantime, here are some tips:

Tips Before Bankruptcy

A Fort Mitchell, Kentucky resident with credit card accounts that have zero balances should stop using them immediately! If the balance is less than six hundred dollars, paying it off may be a good idea before the bankruptcy. However, you should never pay more than $600 toward your debts prior to bankruptcy, and you should always consult with an attorney before doing so. Many credit card companies will keep a person’s account open during bankruptcy if the card has a $0 balance when the bankruptcy is filed. If the account remains open until after the bankruptcy, then that card can be used to rebuild credit.

Tips During Bankruptcy

A Northern Kentucky resident can help to improve credit as well. Reaffirming on a loan or lease for a car will help to improve your credit rating. Future car payments will also help boost your credit score. It is not wise to reaffirm on a vehicle if the payments are beyond your ability to pay, but with a careful budget in place payments toward a mortgage or a car loan will continually improve your credit score. A good Northern Kentucky Bankruptcy attorney will prepare a budget that allows for such payments.

Tips After Bankruptcy

In Fort Mitchell, Kentucky, almost everyone that exits a bankruptcy gets credit card solicitations immediately. If the solicitation comes from a legitimate and well known credit card company, they might help you improve your credit. You’ll need to make sure that the company reports the credit line to the credit bureaus, so the payments on the card will help your credit. If you do accept such a credit card, be sure to charge only minimal amounts to it such as gas or groceries. Most importantly, ALWAYS pay the card off at the end of the month to avoid interest taking a big bite out of your budget. Finally, be sure to always pay all loan or credit card payments on time, as timeliness is important to your credit rating.

Unfortunately, our office does not provide additional services for rebuilding your credit after bankruptcy, although we can help you file bankruptcy or preserve your credit rating before filing bankruptcy. If you’d like more advice on filing bankruptcy or maintaining or preparing to preserve credit during bankruptcy, call Lawrence & Associates at our Fort Mitchell, Kentucky or Warsaw, Kentucky today!

If you are overwhelmed by mounting debt and tired or receiving harassing phone calls from creditors, contact Lawrence & Associates today. We can help you obtain that fresh start that you deserve!

Contact Us (859.371.5997) for a Free Consultation


Illness and Overwhelming Medical Bills Send Many into Bankruptcy

Posted on Thursday, April 2nd, 2015 at 3:53 pm    

chapter 7 bankruptcyAccording to a 2007 study, 62.1% of all bankruptcies have a medical cause and the share of bankruptcies attributable to medical problems rose by 50% between 2001 and 2007. [1] Moreover, a recent article in Forbes highlighted one woman’s story of illness and mounting debt and stated that overwhelming medical bills cause 17-62% of all bankruptcy declarations. [2]

Stephanie Casey Diagnosed with Multiple Sclerosis

The woman featured in the Forbes article, 30-year-old Stephanie Casey, discusses her diagnosis with Multiple Sclerosis and the skyrocketing medical bills and debt associated with the diagnosis. Before the diagnosis, Mrs. Casey and her family were in an ideal situation- they had health insurance, IRA accounts, a sizeable emergency fund, were saving for a home, and no debt. However, the medication for MS rose from $2,800.00 to $3,600.00 per month and even with health insurance, Mrs. Casey was responsible for $250.00 per month. That’s over $3000.00 a year spent just on injections to help slow the progression of MS!

The High Cost of Healthcare

In the article, Mrs. Casey also expresses concern for her future and the future of her family. She states, “If I lose my vision, like 81% of MS patients do, and can’t work–this would mean that I’d no longer be covered by health insurance after 18 months of COBRA–we’re prepared to file for bankruptcy. If I don’t have insurance, and I lose my income, our family would be functioning on my husband’s salary alone to cover a $2,200 a month mortgage–and my $3,500 per month medication.” She goes on to state, “We’d be bankrupt within a few months of running up credit card bills to pay for the drugs, so it would be better for me to file individually, get down to no income and qualify for disability insurance and patient assistance programs from the drug manufacturers.”

Filing for Bankruptcy May Help

Although Mrs. Casey’s situation may seem extreme, many insurance companies in Northern Kentucky cancel coverage when the employee suffers a disabling illness because they become too sick to work, leaving them with medical bills and no insurance.With the rising costs of medical care and the increase of individuals struggling to stay on top, filing for bankruptcy may help relieve some of that debt. A Northern Kentucky Bankruptcy Attorney can help you get a better idea of what disclosures are required in order to file for bankruptcy and what debts will be discharged.

If you are overwhelmed by mounting debt and tired or receiving harassing phone calls from creditors, contact Lawrence & Associates today. We can help you obtain that fresh start that you deserve!

Contact Us (859.371.5997) for a Free Consultation

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