We’ve written a series of blog posts answering questions regarding credit cards and bankruptcy and their financial impact. Call (262) 827-0375

How Will Bankruptcy Change Your Life? 7 Ways . . .

Filing for bankruptcy is a major decision. The circumstances that lead to the decision are usually not very pleasant either. Whether it’s the loss of a job, a major medical procedure, or simply overspending, overwhelming debt can be a major stressor on you and your family. And once you’ve filed for bankruptcy, your life will change. Here are seven ways that bankruptcy will change your life, and what you can expect.

Waukesha bankruptcy attorneyWhile the final outcome of filing for Chapter 7 or Chapter 13 is intended to be positive, there are negatives that come with it. If you decide to file, here’s the bad news that you can expect:

The Bad

  1. Credit Score
    According to Experian, one of the major crediting companies in the U.S., filing for bankruptcy drops credit scores by an average of 80 points. However, it could be much more depending on your specific situation. This reduction in credit rating leads to less trust from future creditors, which ultimately leads to you paying higher interest rates and fees. The bankruptcy will also remain on your credit report for 7-10 years. However, all is not lost. With a newfound emphasis on paying your bills on time, you may be able to establish a more favorable credit rating in as little as two years.
  2. Credit Cards
    Milwaukee bankruptcy no credit cardsYou may be wondering, how or why you’d get a credit card after bankruptcy. As for how, once you file for bankruptcy there’s a good chance you’ll receive new offers for credit cards. While it may seem odd that credit card companies offer credit to people who’ve previously filed for bankruptcy, there are actually creditors who target this high-risk pool. Why? Because they charge higher interest rates and fees, and with these higher fees it’s profitable for them.While the higher rates can seem overwhelming, the opportunity to reestablish your credit rating is actually a plus. If you’re able to consistently pay off your credit card bill each month, it can help improve your credit rating. However, the last thing you want to do is get caught up in more debt. But if you have the money and commitment to paying your bills in full each month, this can be a good option.
  3. Housing
    Once again, we’re going back to your credit rating… Once you’ve filed for bankruptcy, and your credit rating has taken a hit, it can be difficult to find housing. Simply put, you’re seen as a higher risk. So whether you’re trying to rent a new apartment, or applying for a mortgage to buy a new home, expect that you’ll pay higher fees. That may be in the way of a higher interest rate for a new home loan, or a larger deposit for a rental. Yes this is annoying, but it’s important to understand that creditors are merely trying to protect themselves against potentially not being paid.
  4. Employment
    It’s true that it is illegal for employers to ask you about your credit during an interview. However, employers can legally run a background and credit check on you. This may not be an issue in some industries, but in others, such as the financial services industry, it’s common practice. If you are subject to a credit check, and you sign a release letting a prospective employer review your credit, your prior bankruptcy and lower credit score may make it difficult to land the position. Right or wrong, some employers view low credit as a sign that you’re not very responsible.

This may all sound overwhelming. But now that we’ve got the negatives out of the way, let’s look at how bankruptcy can have a positive impact on you and your family.

The Good

  1. Debt eliminated and stress reduced
    No longer having to carry burdensome debt is a huge relief. Over the years we’ve had clients tell us that after their debt was eliminated, they slept better, were less anxious, were happier, and their family life improved. And despite some the aforementioned downsides of bankruptcy, life following bankruptcy was significantly better. With both Chapter 7 and Chapter 13 bankruptcy, your unsecured debt will be discharged. This includes credit cards, car payments, and medical bills. (However, it does not include some debt, such as alimony, child support, and student loans.)
  2. No more collection calls or lawsuits
    Milwaukee bankruptcy don'tsConstant calls from collection agencies can be extremely stressful. If you’ve ever received these calls, you may have noticed that the collection agents can be very harsh, and even threatening. And the longer you owe creditors, the longer the calls go on for.However, the good news is that once you file for bankruptcy, creditors are no longer legally allowed to make such calls. In addition, creditors are no longer able to sue you, or repossess your possessions.
  3. No one has to know
    Many of our clients come to us with lots of embarrassment about their financial situations. And yes, in some instances, this may be justified. We won’t sugarcoat it. But in many cases, especially in cases involving medical bills and job loss, there’s no reason to be embarrassed. Life happens. Still, most of our clients are concerned about privacy. They don’t want people they know to find out about their bankruptcy.The good news is that your finances are your business. Your family, friends, and co-workers don’t need to find out. You can keep it private. The only time your bankruptcy filing would come out would be if you file for a new loan or credit line.

So there you have it, the good and the bad of filing for bankruptcy. Just remember, bankruptcy isn’t forever. After 7-10 years it’s wiped from your record. If you pay your bills on time following your bankruptcy, you’ll be well on your way to reestablishing your credit.  And in the meantime, you’ll get a fresh start financially and, in all likelihood, be much happier once you file bankruptcy, stop the credit harassment, and have a clean slate for you and your family.

And of course, if you live in the Milwaukee / Waukesha area, and need someone to talk to regarding your financial situation, don’t hesitate to give Burr Law Office a call at (262) 827-0375.

Steer Clear of Milwaukee Credit Card Debt: Tips & Tricks

Nobody wants credit card debt. Occasionally, unforeseen circumstances make it difficult to continue best practice for credit card use. The experts at Burr Law Office have the experience necessary to help those that have fallen victim to Milwaukee credit card debt. We understand the stress that goes along with debt and work with clients to bring relief. Here are some tips to consider for safe and effective credit card use.

Don’t over-charge

Credit cards make it extremely easy to make purchases you couldn’t otherwise afford. Many often charge purchases and don’t have the means to pay it off. A good rule of thumb is to only charge things you can pay cash for. In other words, treat your credit card like cash.

Don’t miss payments

Paying off you card each month in full is the best approach. If, for some reason, you aren’t able to pay it in full, it’s crucial that you at least make the minimum payment each month. Missing payments completely will set you back and has serious consequences.

Limit the number of cards you have

People often fall victim to in-store promotions for companies that offer branded credit cards. While it’s okay to have some store cards, opening too many credit cards will hurt your credit. Try to limit the number of cards you open and only open cards you really need or will benefit greatly from.

If you’ve found yourself at risk of debt, contact the Milwaukee credit card debt experts at Burr Law Office. We’ll help you settle your debt and get back on your feet, free of financial burdens.

Safe Credit Card Use for Milwaukee College Students

Credit card companies realize that the first credit card a person acquires is the card he or she will likely keep for the rest of his or her life. Many credit card companies attract new users when they enter college by sending offers or setting up displays on college campuses. Even though credit card use could lead to substantial debt obligations, students who use them wisely can end up building a favorable credit history.

Using a credit card responsibly can help students improve their credit scores so they can qualify for large purchases in the future. As this video explains, it’s best to limit credit card use to small, manageable recurring purchases. This can help students make sure to pay off their balances each month.

If you’re faced with financial problems, contact Burr Law Office for affordable bankruptcy services. You can learn more about our Milwaukee bankruptcy practice by calling (877) 891-1638.

How Credit Card Debt Affects All Income Levels

Milwaukee bankruptcy credit card debtBankrate.com’s 2013 February Financial Security Index revealed that nearly 24 percent of the country has more credit card debt than money saved in the bank. In addition, 16 percent of people claim to have neither credit card debt nor emergency funds saved up. This means that nearly 40 percent of the population is just a financial emergency or an illness away from financial trouble.

Even though average credit card balances have dropped since 2007, most American’s fundamental spending behaviors haven’t changed. The trouble with credit card debt is that it can affect every consumer, no matter his or her income level. People of varying income levels can accumulate credit card debt by spending more than they can pay off in the foreseeable future. According to Bankrate.com’s survey, approximately a quarter of all income levels admitted to owing more in credit card debt than they had saved.

Burr Law Office offers clients in affordable bankruptcy services to help them manage their debt obligations. Call us at (262) 827-0375 or visit our website to schedule a consultation.

How to Live Without Credit Cards in Milwaukee

Milwaukee credit card debt is common among Americans—a recent Fox Business article estimates the average American owes $2,720 in credit card debt. Even though some people don’t plan on using a credit card regularly, they often issue a card in the event of an emergency situation or for expenses like renting a car. Though it’s true that credit cards can serve as useful financial instruments, it’s not impossible to live without them.

Build an emergency fund

Credit cards can come in handy if you run into a financial emergency like needing to pay for expensive car repairs or costly medical bills. If you’re considering living without credit cards, you should first build up an emergency fund. This way, if an emergency does occur after you’ve given up your card, you will be able to pay for these unexpected expenses.

Keep current accounts open

If you already have credit card accounts open in your name, don’t cancel them. Cancelling these accounts can have a negative impact on your credit score. The second you cancel your accounts, all the credit you’ve built up over the years will be eliminated. This can make it more difficult for you to qualify for a mortgage or car loan in the future. You may even have trouble qualifying to rent an apartment.

Diversify your credit portfolio

Your credit score isn’t just based on your credit cards, so you can improve a poor credit score without using a credit card by diversifying your credit portfolio. A diversified credit portfolio typically includes a mortgage, auto loan, or any other type of loan. You may also want to consider using a secured credit card. Unlike traditional credit cards, secured cards have a lower credit limit and require you to put a deposit down upfront. As a result, using a secured card can help improve your score while diversifying your credit portfolio.

Call (262) 827-0375 to schedule an appointment with Burr Law Office. We offer affordable bankruptcy services, including help with filing petitions. Our goal is to help you eliminate or consolidate your debt obligations so you can achieve a fresh financial start.

Consumer Credit Cards & Bankruptcy

Since the recession began in 2008, millions of Americans have had to cope with limited financial resources and growing debt obligations. Faced with medical bills, home foreclosure proceedings, and mounting credit card debt, many people have turned to a bankruptcy lawyer to achieve a fresh financial start. In addition, the credit card industry has seen several notable changes in the way that consumer credit cards are used.

Credit card use among young Americans declines

According to a June 2013 Forbes article, twice as many young Americans are living without credit cards since the recession. Approximately 16% of consumers between the ages of 18 and 29 hadn’t used a single credit card at the end of 2012. As expected, credit card debt among this age group declined by a third, dropping from an average of $3,073 to $2,087 per person. Researchers believe this new trend in credit card use is the result of young Americans watching their parents cope with debt following the recession.

Credit card delinquencies decline

More and more consumers are beginning to pay their credit card bills on time. As a result, credit card issuers are writing off considerably fewer accounts. The delinquency rate is the percentage measurement of credit card accounts that are at least 30 days past due, and between April and May 2013, delinquency rates declined among the six top credit card issuers.

Credit card reinvestment among banks increases

Since 2011, five major domestic midsize banks began increasing investment in credit card programs. The consolidation of credit card businesses coupled with numerous bank combinations has drastically changed the credit card market’s competitive landscape. As current legislation requires credit card pricing practices of large card issuers to be consistent with those of small and midsized financial institutions, more and more midsized banks have begun to enter the market.

Burr Law Office understands the stress that accompanies debt problems. We provide affordable bankruptcy lawyer services to help clients eliminate or consolidate their debt. For more information, give us a call at (877) 891-1638.

Credit Card Mistakes that Recent Milwaukee Graduates Make

Recent college graduates often find themselves facing new responsibilities, including managing their own finances. Not only do graduates have to find a job and a place to live, but they also need to start building up their credit histories. For most college graduates, the easiest way to start establishing a credit history is to use a credit card and avoid common mistakes that many new credit card owners make, including:

Milwaukee bankruptcy after collegeMaxing out credit cards

A credit card can help you build up a credit history and make large purchases. However, while you may now have access to thousands of dollars in credit, you should not spend up to your limit. When you begin using your new credit card, make sure you only charge what you can pay off immediately. Otherwise, you can easily become trapped in cycles of owed credit card debt and interest rates for years to come.

Failing to check a credit report

The stage of life following college graduation can be busy, as you may find yourself engrossed in a new career or enjoying an active social life. No matter how busy your life becomes, be sure to check your credit report periodically. As soon as you graduate, you should pull your credit history and start looking for any errors.

Not confirming all new addresses

In college, you likely grew accustomed to moving to a new house or apartment each year. You may have also returned home for the summer or during a certain semester. When you move to a new city or address to begin your professional career, you need to make sure that your mail follows you. Submit a change of address form and notify any important institutions of your new address so that your utility companies, bank, and credit issuers know where to send your billing information.

The Milwaukee bankruptcy attorneys of Burr Law Office focus on helping clients achieve affordable bankruptcy solutions. If you need debt consolidation assistance, you can schedule a consultation at our office by calling (877) 891-1638. You can also learn more about our range of services by visiting our helpful website.

Common Reasons Why Seniors File for Bankruptcy

Between 1991 and 2007, the number of Americans age 65 and older who filed for bankruptcy more than tripled. Today, senior citizens are the fastest growing group of adults to initiate Chapter 13 and Chapter 7 filings. Here are some of the reasons why older Americans have found themselves overwhelmed by their expenses.

Medical Bills

Major medical expenses can be hard on anyone’s pocketbook, but aging men and women often face additional health concerns. If a senior citizen doesn’t have health insurance, even doctor’s checkups can quickly become unaffordable. Sadly, without proper medical attention, illnesses that go untreated can quickly develop into serious or even chronic conditions. Seniors who must pay thousands of dollars to physicians, hospitals, and specialists are often faced with bankruptcy.

Credit Card Debt

Elderly Americans most often file for the same reason as their younger counterparts: credit card debt. In fact, approximately two-thirds of debtors age 65 and older cite overwhelming credit card debt, interest, and fees as their primary reason for declaring Chapter 13 or Chapter 7. Experts have found that seniors are more likely to feel embarrassed about their mounting bills and frequently simply take out more credit cards to avoid their inevitable financial problems. But when they fail to make minimum credit card payments, filing is usually the only option available.

Inadequate Preparation

If you have been neglecting your nest egg for more pressing financial obligations, you are not alone. Thousands of elderly Americans report being late on rent or mortgage payments, and many even go without required medication or food in an effort to pay off mounting debts. Unfortunately, returning to the workforce is simply not an option for some seniors who failed to anticipate the economic downturn.

Whether you are drowning in medical debt or face insurmountable credit card fees, you have legal options. To speak to a Milwaukee bankruptcy attorney about whether filing may be your best option, call Burr Law Office at (262) 827-0375 to schedule a free consultation today.

See also “Top 5 Reasons People File for Bankruptcy