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May 2018

After Bankruptcy, get a credit card

Posted by / in After Bankruptcy, Weekly Posts /

After bankruptcy, get a credit card. Get a couple.

Getting back to good credit is one of the five ways bankruptcy gives you a new start. The bankruptcy itself helps quite a bit, because the old debts stop chasing you. But to really improve your credit score you have to get and use two or three after bankruptcy credit cards every month. Using credit responsibly leads to a higher credit score, than just having no debt.

Graph showing after bankruptcy credit cards

Getting an after bankruptcy credit card, using it, and paying in full, is a good way to improve your credit.

I reccomend getting about three after bankruptcy credit cards, using them each month to charge something you need, like gasoline or groceries, and paying them in full.

About the time of your bankruptcy discharge, you will get some after bankruptcy credit card offers in the mail. But you should compare those with offers you might find on the internet. I think bankrate.com is a good place to shop for credit cards for people with bad credit. (Right after bankruptcy you are a person with bad credit; if you follow these steps, you soon won’t be.)

When deciding what card to apply for, keep in mind that you are planning to pay the card in full every month. That means you really do NOT care what the interest rate is. You won’t be paying interest because you’ll be paying it off each month. What you want to low or no application fee; and low or no annual fee.

If you can only get approved for one card as soon as the bankruptcy is discharged, that’s ok. Using that first after bankruptcy credit card for a few months, charging and paying off, charging and paying off, will raise your score. So better offers will come your way.   

Here’s a sample of a credit card offer one of my clients got in the mail, about six weeks after her Chapter 7 bankruptcy was discharged.                             



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Apr 2018

After Bankruptcy, check your credit score

Posted by / in After Bankruptcy, Weekly Posts /

After Bankruptcy, check your credit score

Most people have a credit score of about 620 a couple months after bankruptcy.  That’s from a study by the Philadelphia Federal Reserve Bank, a few years ago. (I saved the complete study here.)  And here’s the full size Chart that shows how scores recover.

Credit score bounces back after filing bankruptcy. From Federal Reserve.

Study shows how credit score bounces back after filing bankruptcy.


What’s your after bankruptcy credit score?  One free place to check is Lendingtree. Here.    

Now I can’t guarantee that your score will be 620.  But, if I handled your bankruptcy case and your score is NOT what it should be, follow these instructions and send me your credit report.  We’ll see if there’s something hitting your credit that shouldn’t be there.  

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Apr 2018

For your bankruptcy hearing, you’ll need your Social Security Card

Posted by / in Weekly Posts /

Everyone is required to bring their social security card to their bankruptcy hearing. And a lot of people have lost theirs over the years.
Virginia was recently added to the states where you can use your drivers license and apply on the internet to get a replacement card sent to you.
You don’t have to go to the Social Security Office; you can now do it on the internet.
Here’s the link.




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Apr 2018

Scott Tucker King of Indian Tribe Payday Loans Fined a Billion and Convicted

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As a bankruptcy lawyer, I see many hard working people who fall prey to these internet payday loans. And they are afraid if they stop paying the loans that somehow the consumer had done something illegal.  So I’m happy to have proof of what I tell them. In most cases it’s the internet payday loan company are the ones who have broken the law.

One common scam was claiming that the internet payday loans did not have to follow state law, because the payday loans were made by Indian Tribes.  Scott Tucker, who set up most of those Indian Tribe payday loans, got fined a billion dollars (good luck actually collecting that) and sentenced to 16 years in Federal prison.

Scott Tucker, king of the internet payday loan outfits, also was a professional race car driver. He won’t be able to do that during his 16 year prison sentence.

Last October the Federal Trade Commission obtained a federal court judgment against Tucker for $1.266 billion dollars. 

Next, Scott Tucker was convicted of 14 federal felonies in his internet payday loan empire. 

Then he was sentenced to 16 years, 8 months. 



Mar 2018

Still garnished after 15 Years!

Posted by / in Weekly Posts /

Fifteen years later, Lilly is still getting garnished!

Lilly came to see me in my Sterling office last Friday.  When she was much younger, she got a high interest car loans from Ford Motor Credit.

The car got repossessed, and in 2003, Ford got a judgment against her for $8,051.35.  Plus $1,207.70 for Ford’s lawyer and $33.00 filing fees.

Like many people, she wanted to protect what was left of her “good credit,” so she never talked to a lawyer about it.

She works in a medical office and has had different jobs, each lasting a few years.  Periodically Ford Credit would catch up with her job and put a garnishment on her pay.

Fast forward to 2018. Lilly has paid $23,955.42 in garnishment against that $8,051.35 judgment.  And she still owes $15,814.38!  How can that be?  $29,768.25 in interest of the judgment. Plus $709.50 filing fees for the garnishments.  (Most courts in Virginia charge about $73.00 for a garnishment, it used to be less. So from that calculation Lilly was probably garnished nine times over the 15 years.)  You can see it for yourself, here.

Symphony Claims Her New Start

A week after I saw Lilly. Symphony came to see me, also in my Sterling office. Just like Lilly, Symphony had a high interest car loan with Ford Motor Credit, and her car got repossessed in 2016.  Ford got a judgment against her in July 2017. They started garnishing her in January 2018.

As soon as that garnishment hit her payroll office, Symphony came running into see me.  We got her bankruptcy filed before her first short-check payday, although the day after the check was cut.

garnishment refund

Under Virginia law, filing bankruptcy stops a garnishment and sends that money back to your paycheck.

Filing Bankruptcy Stops and Garnishment and Gets that Money Back

Filing a Chapter 7 bankruptcy stops a Virginia garnishment and gets back to you the money taken. Both Lilly and Symphony now have their money back. (Not for Lilly the whole $23,000–just the money they had gotten from her for this garnishment, which started in January 2018.)

Filing Bankruptcy Helps Your Credit

Both Lilly and Symphony are getting a benefit they didn’t expect.  Like most people, they believe the bank’s propaganda that filing bankruptcy hurts your credit score.  For them, like most people, filing bankruptcy helps.

Fair Isaac, who invented the FICO score, say that if your credit score is in the mid 700’s, filing bankruptcy will drop you about 100 points. With a repossession and judgment, Lilly and Symphony had made their credit about as bad as you can make it.  There scores were nowhere near 700.  For them, and for most people, filing bankruptcy improves your credit.

A study by the Federal Reserve Bank of Philadelphia showed that the average person who file bankruptcy had an average credit score of 538.  And those people saw a 90 point improvement in their credit score in the next six months or so.

The Lesson of All This

If you have a repossession, go talk to a bankruptcy lawyer right away.  Don’t wait for that garnishment that’s surely gonna come. Take advantage of the new start you have a right to, under the law.



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Oct 2017

U S Senate Ignores The Seventh Amendment

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U S Senate Votes to Override Bill of Rights

Last night, the United States Senate blocked an effort to restore a neglected part of America’s Bill of Rights: The Seventh Amendment to the Constitution.

The Seventh Amendment grantees a jury in civil cases; cases where people are suing other people, or corporations. (The better known Sixth Amendment guarantees your right to trial by jury in a criminal case.)

The erosion of the Seventh Amendment goes back to 1925. That’s when Congress passed the Federal Arbitration Act.  The Federal Arbitration Act allowed parties to a contract to agree to resolve disputes in a private, secret proceeding. In the last twenty years, big businesses of all stripes have gotten you to “agree” in fine print. That fine print is in the terms and conditions you sign almost every time you do business with a big business. Your constitutional right is lost.

After the financial crisis, in 2010, Congress specifically asked the CFPB to look at arbitration clauses.

After five years of study, on July 10, 2017, the Consumer Finance Protection Bureau outlawed that fine print surrender of your right to a jury. Starting in 2019 banks and other consumer finance companies and credit bureaus would NOT be allowed to force consumers away from as trial by jury into an arbitration.  The Senate, voting 51-50, blocked the CFPB rule. The Senate let the banks, finance companies and credit bureaus to keep doing what they’ve been doing. Taking away your trial by jury right in fine print.

Consumer advocates loudly supported the CFPB rule and denounced the Senate vote. But the people who like to talk about the constitution were silent. Sen. Mike Crapo (R-ID) sponsored the law, saying there is no evidence that consumer are better off with the right to a jury trial. He wants to see “evidence” that we need that right. According to Sen. Crapo, the fact that a right is in the constitution is not evidence enough

Trial By Jury Was Important to the Founders


Patrick Henry said that trial by jury was essential to keep the wealthy from oppressing the poor.

During the ratification of the constitution, the right to a jury trial kept coming up in the debates. Trial by jury was long established in English law, but the Crown had narrowed those rights for the American colonies. The states feared that the Federal government might someday start acting like the king. The specific right to a jury trial in civil cases was demanded as protection for the average citizen against the power of the wealthy. Patrick Henry was one of those who made that argument. Today the Federal Arbitration Act and fine print agreement have swept away the right to a jury trial.  Just as Henry, and the others feared.

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