16 Aug Parade Magazine Publishes Article About "Bouncing Back from Bankruptcy"
This weekend’s Parade Magazine (the free insert that you can find in most Sunday papers around the country) has published an article entitled “How to Bounce Back from Bankruptcy.” Parade notes that over 1 million people filed for bankruptcy in 2008, which constitutes a 30% increase from 2007.
One of the Parade suggestions especially resonates with me – the suggestion that you negotiate for better credit terms.
My bankruptcy clients have reported to me that they begin receiving credit card offers in as few as six months after discharge (Parade suggests that the process takes a year). Since an unsecured credit card account may be the fastest way to restore your credit, you may be tempted to accept the first offer that comes along.
A better option would be to collect four or five offers then get on the phones to negotiate the best possible deal. After discharge you are a much better credit risk than just about anyone else.
- you can’t file another Chapter 7 for 8 years
- you most likely have little or no remaining unsecured debt
- you have just completed two course – one on credit counseling and the second on financial management
- you have just put together a household budget and have used the bankruptcy process to trim fat from your budget
- you understand clearly the implications of poor credit management
Prior to filing for bankruptcy you most avoided interaction with banks and certainly with credit card companies. They were sources of harassment and you most likely sought to avoid communication with them.
Post bankruptcy, however, you should feel free to take a different attitude. Other than American Express I am not aware of any other credit card issuer that will refuse to offer you credit because you had previously filed bankruptcy. Therefore, if you choose to pursue credit card credit you should not hesitate to ask for a lower rate and better terms than what is initially offered. If you can’t get the terms you want at the outset you can reopen negotiations after a few months of on-time payments.
Obviously if you have been through bankruptcy you should not engage in the same use of credit that got you in trouble but, if you can handle the responsibility, an unsecured credit card put you on the road to competitive car loans and mortgages.
Post bankruptcy you are, in many ways, a clean slate. Do not let the emotional baggage that built up during your previous credit life limit you in terms of what you can and should demand from credit card companies.
by Jonathan Ginsberg, Atlanta bankruptcy attorney
Jonathan Ginsberg, Esq.
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