Armchair Millionaire Community Bulletin: Back on Your
Feet After Bankruptcy
Bankruptcy promises a fresh start to the financially beleaguered.
Take the right steps to make it a new beginning to a financially secure
New York, NY (PRWEB) May 24, 2005 -- Many people filing for bankruptcy
these days have a lot in common with one another. A number of studies have
shown that medical expenses, job loss, divorce or a combination of these
factors are the leading reasons for personal bankruptcy.
the Armchair Millionaire community have their own perspectives on what’s
behind the surge in bankruptcy filings that has occurred in recent years.
Here are just three opinions:
“I think that the credit card
companies are at fault. They extend credit to anyone, allow customers to
defer payments for a year or more, then charge 25%+ interest rates. Now
those same companies wrote the law to make it tougher to declare
bankruptcy. But even mortgage companies are at fault by encouraging people
to buy homes they can't afford, take out home equity loans, or use
interest-only loans.” --YJ
“Chronic overspending is probably the
most prevalent and under-diagnosed addiction in America. It seems that
people can't resist the temptation to spend, whether or not they have the
money doesn't seem to matter. Even in cases where people declare
bankruptcy due to medical bills, they were probably too close to the debt
line and the medical bills were just the proverbial straw that broke the
camel’s back.” --Chris L
“I spent five years as credit counselor.
The problem in most of the cases I saw was peoples' addiction to the ‘must
haves.’ For many, many people, shopping has become the national sport, and
a way to entertain and fill their lives with things, not knowledge or
moments. The cost, unfortunately, is way too high. --A
who’ve gone through bankruptcy know their own reasons for doing so all to
well. More important to these folks is how to get back on their feet. My
guide provides the most important steps.
Millionaire's Guide to Reclaiming Your Financial Life After
Know what to expect. Surprisingly, after bankruptcy,
credit will probably not be harder to get. In fact, many lenders
specialize in extending credit to the recently bankrupt. However, credit
will be more expensive to get (in the form of higher interest rates) and
more limited in the amount you can get. The good news is that even though
the bankruptcy will remain on your credit report for 10 years, it will
gradually become less significant to potential creditors as each year goes
Check your credit report for accuracy. After your bankruptcy,
your discharged debts should all show a balance of zero. Check your credit
report with each credit-reporting agency to ensure that these are properly
recorded. The three major credit bureaus are Equifax (www.equifax.com or
888-766-0008), Experian (www.experian.com or 888-397-3742) and TransUnion (www.transunion.com or 800-680-7289).
credit history with a secured credit card. These cards are backed up by
money that you deposit into a savings account or CD as security. Having
one will allow you to have a positive record on your credit report while
giving you the convenience of a regular credit card.
Join a credit
union. You may find that you can get a loan more easily and with better
terms through a credit union than through a bank.
Don’t go there
again. Even though credit will be available to you after bankruptcy, use
it conservatively. Pay off your balances in full each month. Build up an
emergency fund in order to be able to cope with the unexpected. And don’t
go without health insurance--even if it’s just a basic policy covering
major medical expenses--so that you’re not financially derailed by an
The Bottom Line: Bankruptcy promises a fresh start to the
financially beleaguered. Take the right steps to make it a new beginning
to a financially secure life.
The Armchair Millionaire Weekly
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Lewis Schiff founded the Armchair Millionaire Web site in
1997. His first book, The Armchair Millionaire, was published in 2001.
Schiff's newest report, "How to Know When You Are Rich," is now available
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Source : http://www.prweb.com/releases/2005/5/prweb242771.htm