Your FICO (credit) score is your key to getting a loan.  When your FICO score is pulled for a home or car loan the score determines if you are qualified to borrow the requested amount and then what interest rate you will pay on your loan. The FICO score alone could disqualify you from the loan or increase the interest rate you will pay for your purchase. If you have filed for chapter 7 Chicago or foreclosed on your home, your credit score is going to need some work before you can get a loan.

We are all familiar with what a credit score is but very few know what goes in to the number.

35% of the score comes from how much debt you have compared to how much credit you have. This is called your debt-to-credit ratio.

10% of your score comes from what kind of loans you have. For example, credit card debt is also known as unsecured debt and is a less stable form of a loan. When you have a mortgage or loan out on a car or house it's considered a secure loan. That is because there is an actual item backing the debt. Secure debt is better received in your credit score.

10% of the score depends on the number of credit applications you have recently filled out. Every time you apply for a credit card (including store cards), car loan, mortgage etc. your credit report is pulled. To differentiate, if you are asked for your social security number on an application, they are going to pull your credit.

35% of your score is dependent on your track record for making on-time payments. This is an easy habit to get into that will improve your FICO score.

15% of your FICO score is based on how long you have been building up your credit history. Blemishes on your credit record stay for as long as 7 years and will continue effect your credit score.

Your Chicago bankruptcy lawyers will tell you that the better you understand your FICO score the easier it will be to increase it. If you have filed for bankruptcy in Chicago or if you are trying to get back on your feet financially for another reason rebuilding your credit is the first place to start.

DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang & Carlin shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.

Credit Card debt is a big problem in America. The July issue of Woman's Day reported that the average household carries over $10k in credit card debt. Once you've gotten this deep in credit card debt it can begin to feel impossible to get out of it.

If credit card debt gets out of control it can very easily lead to chapter 7 in Chicago.

This is because a lot of Americans do not know how to start digging themselves out of debt and don't know that there are credit counseling and financial advisors available to them.

The first step in recovering from credit card debt is to start looking at the numbers. Look at your total debt and figure out how long it will take you to pay off if you only pay the minimum. The answer will be staggering enough to make you want to pay a lot more than the minimum. But for those who carry debt on multiple cards it can be hard to decide where to start paying down.

The best choice is to pay extra on your credit card with the highest interest rate. While you are paying that down just pay the minimum on your other cards. Once you pay one off move to the next highest interest rate card.

If you have good credit you may be able to get a low interest credit card. If that is possible you should consolidate all of your credit card debt onto that one card and start paying it down.

The July issue of Woman's Day suggests that if you are tempted to make a purchase using your credit card look at the price of the item and break it down with your hourly pay rate. How many hours would you have to work to pay for this item? And if you charge it you should figure you'll pay double for it before it's paid off when you factor in interest. This should make you think twice before making an unnecessary purchase.

Evaluating your credit card situation and putting together a plan is the best way to avoid chapter 7 Chicago.

DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang & Carlin shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.

As of August 2010 the Credit CARD Act is complete. President Obama decided to make it a law in May of 2009 and all the phases of the project are now complete. The law has the ability to aid some Chicago debtors enough that they are able to avoid bankruptcy. Chapter 7 bankruptcy is the most common form of bankruptcy for those with credit card debt.

The law was phased in slowly, over a period of 15 months. This law is rich with benefits for those who have a tendency to get into credit card debt and are threatened with bankruptcy but it also has a few disadvantages.

Advantages:

1. Easy to understand terms. How many times have you received a small pamphlet in the mail from your credit card company updating the terms of your card. Filled with small print and complicated jargon terms have a history of being confusing. The new credit laws will change that.
2. No retroactive interest rate adjustments on existing balances. This means your entire balance will not increase when the interest rate changes.
3. More warning when terms change and the right to opt-out of major changes to credit card terms.
4. More time to pay bills. A 21 day period will be given after a credit card bill arrives before payment is due.
5. Pay high interest debt down first. Some debt on a credit card may have a different rate. This new law requires that all payments go towards the debt with the highest interest rate first, paying it off faster.
6. Opt-in to go over your limit or have your card declined. If you don't opt-in to have your credit card declined if you go over the credit card limit the purchase will be allowed and you will be charged a fee. The new law states that the fee for this cannot be higher than the overage. For example, if you go over the limit by $15 then your fee is $15.
7. Late fees are capped at $25. Unless you are frequently late.
8. Ramifications of minimum payments is clear. Each bill includes a table telling you how long and how much you will pay if you only make minimum payments.
9. Secured credit card fees are limited. Secured credit cards help people with bad credit get back on track. This is done by paying your credit limit up front. The credit card company takes a percentage of that as a fee. The new law says they can take no more than 25% of the available limit in the first year of the card.
10. Legitimate due dates. When a credit card due date falls on a weekend or bank holiday a late payment will not accrue a fee.

1. Limited credit for the young. If you are under 21 you will need a parental co-signer to get you a card.
2. Return of annual fees. The benefits above are gong to cost credit card companies money. To fix that, annual fees will become more common. This will also make credit cards harder to obtain for those with low incomes.
3. Decrease in rewards cards. The loss of income for the credit card companies will also affect the number of available rewards credit cards.

Ultimately the benefits of this new law completely outweigh the negatives. Smart credit card usage can build your credit score. These new changes will make credit cards better and may even keep some Chicago residents from filing chapter 7 bankruptcy.

DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang & Carlin shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.

There are many reasons why we may be passed up for a job. The most common would be a better, more experienced candidate or a change in hiring requirements during the process. People who have filed bankruptcy often go into the job search process with the fear that they may be passed up due to having chapter 13 bankruptcy on their record. Chapter 13 bankruptcy is often looked at more favorably than other types of bankruptcy but there is still workplace concerns surrounding bankrupt employees.

In order to qualify for chapter 13 bankruptcy you and your bankruptcy attorney show the court that you have a steady income. This income will allow you to make payments towards your debts for 3-5 years before you are discharged of the remaining debt. For those who file chapter 13 their job security is extremely important.

The 3-5 year payment plan is a long time and a new job opportunity may present itself during this time. Should the job be a promotion it could help rebuild their financial profile and get them back on track with debt.

Background and credit checks have become very common in human resources hiring processes. This means that when you apply for a job and get close to being hired your potential employer is very likely to find out you have filed bankruptcy.

Thanks to the Bankruptcy Act of 1978, those who have filed for bankruptcy are protected against discrimination in the workplace. This means that a candidate cannot be passed up simply because of the fact that they have filed for bankruptcy.

In the United States we are also protected from discrimination due to our ethnicity, gender, religion, age, and even if we are pregnant. This is thanks to the Civil Rights Act of 1964.

Because of these laws all people can feel confident and honest when they enter into a new job search.

DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang & Carlin shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.

It is very easy to confuse your credit limit with your spending limit. It is true that the credit limit given to you by your credit card company is the dollar amount that they will allow you to spend. There are several reasons why spending the total amount is a bad idea.

1. Your Credit Score - The best way to grow your credit score is to use 10% of your credit limit and no more than 30%. Minimizing your use of available credit makes you a more responsible borrower.
2. Repayment - Credit limits are generous. The more you spend the more you have to pay back and if you are unable to pay it back in full or can only making the minimum payments you are looking at a long payment plan and a lot of interest.
3. Maxed Out - Once you spend your credit limit in full you don't have anymore to spend. If your minimum payment is $100 and you make that payment you only have what you paid down to spend in the following month. This will make credit card usage a lot tighter.

No matter your spending habits it's important to act responsibly with your credit cards. Getting too far in debt with them can quickly lead to bankruptcy. Avoid this outcome by spending responsibly and paying off your credit card every month.

DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang & Carlin shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.

After you file for bankruptcy your credit score will undoubtably go down significantly. The good news is that as soon as the ink drys on your bankruptcy filing you can begin rebuilding your credit.

Both a secured and unsecured credit card is a great first step towards improving your credit. Unfortunately an unsecured card can be harder to obtain with a low credit score and bankruptcy on your credit report.

That is where a secured credit card comes in. You can get a secured credit card after filing for bankruptcy because you will be required to make an upfront deposit when opening the account. This deposit acts as your credit maximum and serves as collateral for the money you spend on the card. Unlike a debit card you will still get a monthly bill and be required to make a monthly payment. If you only pay a fraction of your balance you will likely acrue finance charges on the balance.

A secured credit score is a great stepping stone to show that you are financially trustworthy and it will reflect in your credit score.

DISCLAIMER: All information on this website are provided for informational purposes only and are not intended to be construed as legal advice. Chang & Carlin shall not be liable for any errors or inaccuracies contained herein, or any actions taken in reliance thereon.