Frequently Asked Questions about New Jersey Bankruptcy

Bankruptcy FAQs

Will the recently enacted bankruptcy laws make me ineligible for a fresh start?

It’s true that Chapter 7 bankruptcy laws have made it more difficult to qualify for a fresh start, but a healthy percentage of applicants do still qualify for this type of bankruptcy. Every situation is unique, however, so the best course of action would be taking advantage of the free Chapter 7 bankruptcy consultations we offer here at Veitengruber Law. This process allows us to present you with the options that will benefit you most over the long term.

Which type of bankruptcy filing will be best for me?

If a debtor files Chapter 7 bankruptcy, the law requires that the debtor relinquish all property in excess of a set monetary limit in order that it can be liquidated through sales to creditors. However, in most of these cases, real property is exempt. This is to permit the debtor to be somewhat well positioned for a fresh start.

Chapter 11 bankruptcy is designed for business and individual debtors who have taken on immense personal debt.

Chapter 12 bankruptcy is only available to family-owned fishing businesses and family farmers.

Chapter 13 bankruptcy is usually called a “debt adjustment” since a debtor is required to file a concrete plan to repay most or all of their debts within their current income parameters.

What are New Jersey’s specific requirements for filing bankruptcy?

In order to qualify for Chapter 7 bankruptcy in New Jersey, a debtor must provide a wide array of personal information regarding their financial status. These categories include, but are not limited to: all creditors and any collection agencies, secured claims, unsecured claims, any existing debt schedules, pensions, stocks, real estate holdings, and the value of the debtor’s life insurance policy.

Once you have arranged your free consultation, the experienced team at Veitengruber Law will carefully explain the applicable filing requirements. Additionally, your bankruptcy attorney at our firm will go through this list with you to be sure you’re prepared to go forward.

Will I be permitted to keep any of my property?

When filing for Chapter 7 bankruptcy, a debtor is permitted to retain property that either state or federal law has declared exempt from the claims of creditors. The debtor is given the option to choose which set of exemptions is more advantageous, but often the federal laws are more favorable.

 

Will I be permitted to own anything once I have filed for bankruptcy?

Absolutely. It’s a common misconception that anyone who has filed for Chapter 7 bankruptcy is prohibited from owning anything. Bankruptcy is not intended to be punitive.

However, it’s important to note that if a debtor does come into an inheritance, receives a personal property settlement, or benefits from a life insurance payout within the first 180 days after filing for bankruptcy, this income or property will almost certainly be flagged as being owed to creditors unless it is specifically exempt.

Will I still be protected from discrimination despite my bankruptcy?

Federal law (No.11 U.S.C. sec. 525) protects you from discrimination from both governmental units and private employers due to your having filed for bankruptcy or failed to repay dischargeable debt.

Will I be required to appear in court?

Yes. Once you have filed your Chapter 7 petition, the court will schedule a formal Meeting of Creditors within 30 – 90 days. The Federal Court Trustee in Newark, Camden, or Trenton will conduct the meeting. Counsel will be present at your side to assist you as you answer questions intended to help the appointed trustee decide if you possess assets that should be distributed to your creditors. Additionally, the trustee will attempt to discern if you have filed your petition for Chapter 7 bankruptcy in good faith.

Will bankruptcy ruin my credit rating?

While it’s undeniable that having a bankruptcy on your credit report does damage your rating, it’s also true that over time, the bankruptcy itself can be less detrimental than a years-long history of unpaid debts and judgments against you. In fact, many people find that once they have filed for Chapter 7 bankruptcy, they receive offers for fresh credit cards and are even able to obtain them! Lenders are overall more likely to view you as less risky once you are free from your huge burden of debt. After all, they are guaranteed that you will not be permitted to file for bankruptcy for a minimum of six years.

Does bankruptcy erase my debts?

While bankruptcy will erase most of your unpaid debts, there are notable exceptions.

Bankruptcy normally does not adjust:

  • Alimony or child support obligations
  • Some unlisted debt
  • Loans obtained under false pretense
  • Fines
  • Debts resulting from willful and malicious intent
  • Student loans

Additionally, mortgages and any other liens that are not paid via the bankruptcy may be attached to the property. They will not be reattached to you personally until and unless you decide to reaccept the obligation. If the creditor sells the property, the bankruptcy completely absolves you of all obligation to repay the debt.

Are there other viable options for getting out from under my debt?

Once a debtor has been hounded by creditors and has realized that they have very little hope of paying off their debts, the promise of a fresh start through bankruptcy can seem like the only escape. While bankruptcy is the best course of option for a good portion of overwhelmed debtors, it can also greatly impact their credit rating and their ability to purchase large items such as a home or vehicle. Therefore; it is prudent for debtors to carefully consider less drastic alternatives.

This caveat is especially pertinent if the debtor’s financial problems are likely to be merely temporary, in which case creditors may accept smaller payments, or stretch payments out over longer periods of time. It helps the debtor’s credibility if they have demonstrated prompt payment habits in the past, or if they inform their creditors that they are facing potential bankruptcy. Creditors are eager to avoid bankruptcy if they may reasonably expect that the debtor will be capable of and willing to repay their debts over time; once bankruptcy proceedings have begun, they are unlikely to recover anything, or will only be able to garner a fraction of what they are truly owed. Creditors also often like to avoid court proceedings connected to bankruptcy because they are costly and time-consuming.
Veitengruber Law works with our clients to present them with every available avenue of debt relief so that they are able to make a fully informed decision. We will work together with you to get you to the other side of debt. To find out what debt relief solution is right for you, schedule your free consultation with us today.

 

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Legal Dramas: How Accurate are Your Favorite TV Shows?

If you’re one of the millions of fans who have consistently tuned in to television’s many legal dramas, you may have questioned how closely these entertaining shows portray the reality of the daily life of attorneys. Whether you caught one (or all) of the Law & Order series, fell in love with Denny Crane on Boston Legal, met the soon-to-be-royal Meghan Markle on Suits, or devoured your weekly popcorn while watching the tense How to Get Away With Murder, you may have walked away from your favorite legal drama having formed quite a negative impression of attorneys.

Unfortunately, it’s probable that the show you watched portrayed most of its attorneys, whether they represented individuals or corporations, as self-centered, amoral liars. While it’s true that—as in all professions—there will be the occasional awful attorney who deserves to be sanctioned, the reality of most lawyers bears little resemblance to the antics TV lawyers get up to.

While we could spend hours listing the discrepancies between legal dramas and the more average day-to-day reality of financial legal work, but these are our Top TV Legal Drama Inaccuracies:

  • Real life attorneys never have the luxury of focusing on one case at a time. While no 40-minute show could cover this without severely confusing the viewers, the reality is that even moderately successful financial lawyers carry a huge case load that divides their attention in several directions at once.
  • Attorneys tend to be honest individuals. Television shows about honest, hard-working lawyers are unlikely to exert a huge draw, so networks and producers instead tell stories about lawyers who lie constantly. The truth is less exciting, but we hope it’s reassuring: real-life attorneys are more likely to be good, civic-minded people who are passionate about our intricate legal system. While our delicately-balanced legal system relies on us to do our absolute best for our clients, this simply does not extend to lying.
  • Attorneys are here to help. TV dramas would have their audience believe that attorneys are somehow delighted when clients come to them in distress, that they don’t have any human empathy. In fact, when an attorney chooses a specialty like bankruptcy, credit reapair, or real estate law, it’s almost always because they want to ease their clients through highly stressful, troubling times. It’s highly rewarding to connect with people who need someone to protect the financial fabric of their lives; this aspect of financial law never loses its appeal.
  • Attorneys cannot read minds. While television dramas tend to portray lawyers as keenly insightful, worldly individuals who possess uncanny abilities to size up their clients and deduce whether or not their clients are good or bad, and then wrestle with whether or not they should take them on as clients, the truth is that any good attorney withholds judgment on such things. We’re here to assist our clients in their time of need, period. The law in our country cannot function unless everyone has the right to an attorney to represent them in any legal proceedings.
  • Lawyers have personal lives. Sure, grocery shopping and going for a run just isn’t interesting, but even the most extremely overburdened lawyers have fulfilling lives outside of the courtroom. They didn’t choose the law the way a monk or nun chooses a religious life; many have partners, children, warm homes, and the occasional family spat just like anyone else. While the stress of a busy career can exacerbate existing tensions, lawyers are no less functional in their families or communities than those who have similarly busy careers—doctors, nurses, or firefighters, for example.

 

Why Post-Sheriff’s Sale Mortgage Modifications are Unicorns

mortgage modifications

Homeowners who have found themselves struggling to make their mortgage payments may end up in foreclosure sooner rather than later. Even missing a few payments, even if you then get back on track, can cause some lenders to initiate foreclosure proceedings.

It’s true that it can be easier to ignore a potential “foreclosure warning,” even if you know you’re behind on your mortgage. Believe us when we say that burying your head in the sand is something A LOT of people do. The problem with this coping technique is that it almost always ends up with the homeowner losing their home to foreclosure – even if that is not what they want.

If you’ve found yourself at risk for foreclosure, it’s important to seek help NOW from a NJ foreclosure defense attorney before your home is foreclosed by your lender. Once your home is sold at Sheriff’s Sale, it is much more difficult to redeem your mortgage (read: get your home back).

When a property has already been foreclosed upon and the Sheriff’s Sale has passed, the original homeowner has ten (10) days to redeem the mortgage. As you can imagine, ten days is a very short period of time for any legal process. (NJ foreclosures fall under the category of “judicial foreclosures,” which means all documentation and proceedings must go through the New Jersey Court system.)

Because the ten-day time limit post-Sheriff’s Sale is so painfully short, we often say that a mortgage modification after foreclosure sale is a unicorn. They are rare, hard to accomplish, and almost impossible to find examples of.

UNLESS…

You can increase your odds of being approved for a mortgage modification after foreclosure sale – and that is by filing for bankruptcy. In New Jersey, filing for bankruptcy gives foreclosed homeowners sixty (60) days post Sheriff’s Sale for redemption.

Sixty days is a whole lot better than ten days! In two months, Veitengruber Law can help you apply for and obtain a mortgage modification even after your home has been sold at Sheriff’s Sale. HOWEVER, the odds of success of receiving a loan modification within that 60 period is fairly low.  It requires the homeowner to be organized and diligent in document production. It also may require a short sale or a hard money loan (or 401K loan, pension loan, or personal [family] loan).

A mortgage modification is necessary because your previous monthly mortgage payment was obviously too high. Redeeming (re-assuming) your mortgage as is will only end badly. You also have the option to attempt to sell the home via sale, short sale or Deed-in-lieu.

For whatever reason, if you don’t want to file for bankruptcy, the chances of saving your home via redemption after the foreclosure sale are low due to the ten-day bankruptcy guideline and you will have a relatively short amount of time to vacate your home after the sheriff sale occurs.

On the flip side, homeowners who proactively approach a foreclosure defense attorney before their home has sold at Sheriff’s Sale have a much better chance of being approved for a mortgage modification. This will allow you to keep your home without struggling so hard to make your mortgage payments, as they will be reduced to fit within your budget. Once you are approved for a mortgage modification, your foreclosure case will be closed.

NOTE: If your home is scheduled for Sheriff’s Sale within 37 days or less, you will need to file for bankruptcy in order to apply for a mortgage modification. This is further proof that taking action as soon as possible is best if you want to keep your home. When you come to your NJ foreclosure defense attorney more than 37 days before your Sheriff’s Sale, you’ll have more options, and you will not have to file for bankruptcy.

 

 

Should Law Firms Care About Online Reviews?

NJ bankruptcy attorney reviews

In today’s tech-centric world, online reviews can cement your reputation as either a credible business that is fair and easy to work with, or a deceptive business that is difficult to work with and cares little about their clients. Law firms are no different, and your online reputation means everything to your current and potential clients. A plethora of positive reviews online may be the single most important deciding factor in a client choosing to hire your firm over your competitor’s firm. Conversely, negative reviews can leave potential clients with an uneasy apprehension about hiring you and therefore they may likely consider hiring a competitor that has stronger online reviews instead.


How does a law firm go about securing solid online reviews? Here’s a hint: it starts with positive customer interactions.


It should go without saying that any reputable law firm should place quality customer care as a top priority. Customer care encompasses everything from returning client calls and emails in a timely manner while directly addressing all of their questions and concerns, to remembering to explain legal concepts and jargon in layman’s terms. While it can be easy to forget and revert to “legalese” when passionately absorbed in talking about a case, it is important to consider that your client likely doesn’t have a background in law and conversing in plain English makes you a more down to earth attorney.

Practice the nearly lost art of active, attentive listening. Try not to become distracted by your digital devices during face-to-face client meetings. Take notes on paper if you have to, but be engaged as the client is telling you their story. Try not to interrupt too frequently with questions. Take the extra time to listen to their whole story first, then go back and ask pertinent questions after they have finished. This shows your client that you respect them, value their time, and are genuinely interested in what they have to say.

If you’re already routinely practicing the aforementioned approaches in your client interactions, you’re likely also confident that you possess the legal experience, interpersonal skills and integrity to represent your customers fairly and successfully and ultimately win cases in their favor. So how do you go about soliciting for positive reviews in a non-awkward way after having successfully represented your clients? There are a few subtle yet straightforward approaches you can take to gently encourage satisfied clients to leave you a positive review online. Most former clients are happy to take a few extra minutes out of their day to oblige. This is especially true if they’ve had a good experience working with you and would hire you again in the future or recommend your legal services to friends and family.

Here are a few ideas on ways to obtain online reviews that will represent your firm in a positive light.

 

  • Feel free to include a tactful written request for reviews in the close-out letters you send to clients. This is a great way to plant the idea of writing a review in your client’s head without coming across as too pushy or arrogant.

 

  • Get in the habit of following up with a thank-you email to clients after their case has been closed. Thank them for choosing your law firm and giving you the opportunity to represent them. Make sure you emphasize that client satisfaction is a priority and that you’re always interested in feedback. Include a link to your Google business page or other relevant review site for their ease and convenience.

 

  • In a final follow-up phone call, ask your client if they are satisfied with the services you’ve provided and if there is anything you might be able to improve upon in the future. Be careful with this option, as some people don’t like to be put on the spot, and would rather have a chance to reflect upon something in writing before they commit to leaving a review. However, depending on the personality of your client, they may prefer talking on the phone and may happily agree to write a review, where you can then follow up with a final email that includes links to where you would like them to leave a review.

Here are a few of our favorite reviews from satisfied customers:

“I had a consultation with George regarding some questions I had about a loan modification. He was able to put everything into plain English for me and gave me sound advice as to handle my particular situation. He very patiently listened to all my concerns and while I knew he had another appointment coming in, he didn’t rush me or cut me off. In sum, I would highly recommend him to anyone seeking advice on mortgage or foreclosure issues. He’s obviously a great lawyer, but, maybe more importantly, a genuinely good guy.” -Laura Turner

“Great Mortgage Lawyer. Down to earth and to the point.”-Richard Greene

 

“I have sent many people to George to help them with foreclosures and bankruptcies. He has always delivered and went out of his way to make sure they were satisfied. I highly recommend him and his firm.”-Dr. Phillip Agrios

 

“I am an attorney in Arizona, and from time to time I have needed information regarding New Jersey law. I have found Mr. Veitengruber to be very knowledgeable, and still friendly and approachable. I am glad that I will never have to try a case against him.”-Thomas Cesta

Will I Lose my Alimony if my Ex Files for Bankruptcy?

When it comes to the complexities that come with divorce, most divorced couples find that one of the most stressful aspects is – you guessed it – money. Both parties will feel the effects of their divorce in the two places it hurts most – the heart and the wallet.

Regardless of how intertwined you and your (soon to be ex) partner kept your finances when you were married, going from living on two incomes to scraping by on one is never easy. This is especially true if you are the spouse who makes less money, was a stay-at-home parent, or have been otherwise dependent on your partner financially.

If your marriage resulted in children and they’ll be living with you after the divorce, you’ll be able to benefit from child support payments from the non-custodial parent.

Children or not, you may also benefit from alimony in order to help you maintain the quality of life you enjoyed while married.

In theory, the concepts of child support and alimony can help a newly single parent stay out of debt and continue paying all of the bills on time. The reality, of course, is that not every person will come through with the payments – for a number of potential reasons. A big question on many splitting couples’ minds is:

What Happens if my Ex Files for Bankruptcy?

Prior to 2005, filing for bankruptcy in New Jersey could help lower the amount of child or alimony support an ex-spouse had to pay each month. Luckily, amendments made in 2005 to the Bankruptcy Code set stricter enforcements into place to protect individuals who are entitled to domestic support obligations.

In Section 523, the U.S. Bankruptcy Code delineates that “domestic support obligations” are not dischargeable when an individual files for bankruptcy. In addition to alimony, “domestic support obligations” also include child support and money owed to the petitioner’s former spouse, child, legal guardian, or the government.

The spouse entitled to receive support may understandably be quite nervous if the other party files for bankruptcy after their divorce. Because of the 2005 amendments, the receiving spouse doesn’t even have to file a claim with the Bankruptcy Court.

What About the Automatic Stay?

As soon an individual files for bankruptcy, all creditors are obligated to stop collecting debt money. This is known as an automatic stay. The collection of alimony or child support does not fall under the enforcement of an automatic stay; rather, it is held in higher priority under the Bankruptcy Code. In other words, before any other debts from creditors are considered, alimony and child support need to be paid.

There is no difference between Chapter 7 and Chapter 13 bankruptcy when it comes to alimony. Individuals who file for either chapter are still required to pay (in full) any alimony and/or child support obligations.

Are There any Exceptions?

There are two very specific situations in which “alimony” can be discharged in bankruptcy.

  1. Sometimes, a divorce decree states that one spouse has a monetary obligation to be paid to a spouse, and it is mis-labeled as “Alimony.” If it is determined that the obligation is not actually alimony, then it can be discharged. For example, the divorce decree may state that “Husband shall be responsible for $10,000 of a debt accrued during the marriage (often credit card debt).” At times, items like this can be labeled incorrectly as alimony, when in fact, it is completely separate from alimony. Once this monetary obligation has been legally determined as “non-alimony,” it then becomes dischargeable.
  2. The second exception occurs if an individual has a monetary obligation to a third party. For example, Bob and Mary Jones divorce, and Bob is required to pay Mary $1000.00 per month. Bob decides not to pay the alimony, so Mary assigns her father the responsibility of collecting the alimony. Mary still needs the money and her father distributes it to her, but there is no record of that. Now that Mary’s father is responsible for collecting the alimony, if Bob files for bankruptcy, the order to pay alimony can be discharged since it was assigned to a third party.

Help with a New Jersey Bankruptcy

If your ex does file for bankruptcy, they may be granted forgiveness of other debts like credit card debt, or past utility bills.


TO BE CLEAR: It is not possible for your ex to file for bankruptcy in order to get out of paying domestic support. They can file for bankruptcy, but they cannot discharge child support OR alimony.


 

Paying alimony or being entitled to receive alimony while filing for bankruptcy can be a sticky situation for all of those who are involved. Rifts between family members can occur, and they normally don’t end well.

If you are the person filing for bankruptcy, work with an experienced NJ bankruptcy attorney rather than trying to go it alone to ensure that all of your obligations are being met. In the end, it will be well worth your investment of time and money.

Making Sure Your Loved One’s Final Wishes are Respected

At some point in our lives, we all come to the end of the last chapter – the place at which life ends. Sometimes this chapter is short and sweet and for others, the process can be drawn out and more difficult. Often, at that time, many people simply want to keep their loved ones close and help them uphold their dignity. As the caregiver, it’s your job to make sure this happens. Your goal is to honor their dignity while also respecting their final wishes.

If your loved one’s death was sudden, you may not have been given the chance to discuss their wishes before he or she passed. Without this knowledge, it can be difficult to know exactly what he or she would want, but it’s important make your best judgement for each decision that you face. On the other hand, you may have had the opportunity to talk with your loved one if his or her death was not unexpected. This facilitates decision-making when it comes to final wishes.

There is research that has shown that many seniors lack the necessary tools to ensure that their wishes are going to be upheld and carried out by caregivers or family members. It’s possible that this is due to the fact that people avoid the topic of death. Individuals are more likely to think about this when a family member is ill, but in the case of a stroke, heart attack, or other deadly event, it will be too late. Sometimes, decisions are made for that person that go against what the individual actually would have wanted if he or she would have had a say.

There are two ways in which you can be sure that your final wishes will be respected. First, gather the correct legal documents. Second, don’t hesitate to communicate your desires to family members and others close to you.

The two important documents that are necessary for every individual include a living will and a power of attorney for healthcare. A will, sometimes called an estate plan or last will and testament, usually refers to information that delineates your loved one’s final wishes in regards to his or her assets. Typically, an estate plan will detail what assets go to each family member or friend.

A living will is a type of an advance directive in which an individual specifies what actions are to be taken or not taken in the event that they are incapacitated and can no longer make decisions for themselves.  A medical power of attorney is the most significant document that any person should have in place. This document authorizes an individual (an agent) to make decisions on behalf of someone who is incapacitated. If an individual is forced to make important decisions regarding their care, but is unable to due to a medical issue, he or she will want a trustworthy family member or friend that can uphold their wishes and quality of life in that situation. It’s not a good idea to store these documents in a secret or conspicuous location. Communication with your spouse and other loved ones is key in this process.

So many different names for these documents exist in each state, making it ever more important to have a bit of background information on these end-of-life processes. Because a regular power of attorney cannot be used in medical decisions, it’s necessary to designate a medical power of attorney or healthcare proxy. When and only when an individual is unable to make his or her own medical decisions, a proxy can then step in.

Although it’s a difficult planning process, thinking ahead and making important decisions concerning these crucial situations while you’re healthy can ensure your wishes are carried out. The decisions about these documents clarify your wishes to your family, close friends and health care providers.

How Can an Attorney Help me Get out of Debt?

If you find yourself saddled with more debt than you can comfortably pay back in a timely fashion, it may be time to consider seeking professional counsel to help you resolve your debt in a manageable way. An attorney is often a good place to start, even if you’re unsure if your debt is serious enough to warrant professional help. A qualified attorney will be able to determine if and how they can be of assistance to you during a private consultation.

Learn your options

For starters, you need to find a NJ-certified attorney you are comfortable with disclosing your unique financial information to, including all of your debts. Whether you’re drowning in six figures of debt, or simply have a few unpaid medical bills, your attorney will need to know the scope, nature and sum of your debt to determine if you may be a candidate for any reputable debt consolidation programs, whether it’s time to consider bankruptcy, or, if they may be able to negotiate a lower debt repayment rate with any debt collection agencies pursuing payment from you. Debt collectors do appreciate when you reach out and demonstrate a good-faith effort to consistently pay on time, even if you cannot afford to pay the minimum required amounts.

Debt repayment negotiation

If you have something like past due medical debt, it may be easier to negotiate a lower rate, as oftentimes hospitals are able to write off at least a portion of the debt and use a sliding scale to determine whether or not a patient is eligible for financial aid. Do you have childcare, child support or other necessary expenses? Have you demonstrated a consistent effort to chip away at your debt even if you cannot afford your monthly minimums? An attorney will be able to better negotiate with your debt collector on your behalf. While many debt collectors can be heartless and ultimately do not care about any of your other financial responsibilities other than the debt you owe to them, your attorney has a good chance of arguing successfully on your behalf and ultimately negotiating a pay-back plan you can realistically afford.

The B-word

If your debt is truly beyond your financial ability to realistically pay back, it may be time to consider a more drastic solution like bankruptcy. While bankruptcy can sound like a scary word, it need not be as daunting and overwhelming as it sounds. An attorney will be able to walk you through every step of the process and explain how bankruptcy may impact your life going forward. With careful planning, bankruptcy may not be as painful of an experience as rumor would have it. It will not hinder you financially for the rest of your life, however you can expect some changes to your immediate financial future.

Life after bankruptcy

However, there is a light at the end of the tunnel. You will be taught how to bring your score back up even higher than what it was pre-bankruptcy, which is possible in just 12-18 months. There are some fairly straightforward steps you can take to start rebuilding your credit, even during bankruptcy proceedings to get on a better financial path. An attorney can steer you in the right direction, and if necessary refer you to a financial planner who has experience in budgeting, credit building and other financial planning skills to set you up for success once your bankruptcy has been fully discharged. There is no time like the present to get established on the right path to a debt-free future.

8 Little Known Credit Score and Credit Report Facts

Cash is quickly becoming a thing of the past, being replaced by plastic and virtual payment methods. Credit cards are now everyone’s new best friend. Along with a credit card comes a credit score and credit report, which leads to the first thing you may not have known.

 

1. Credit scores and credit reports are not the same thing.

Yes, they are two different things. Credit reports include information such as how frequently you apply for credit, data about your credit accounts, your payment history, a few public records, debt collection and a few other related points. Credit scores, on the other hand, are calculated based on the data found on your credit report.

 

2. Specific employers check credit scores.

Did you know that applying for a job in certain industries will most likely cause your credit score to be checked by your potential employer? These industries/jobs include the armed forces, Transportation Security Administrators (TSA), law enforcement, financial planners/accountants, mortgage loan originators, and, believe it or not, parking booth operators.

 

3. You could catch a criminal!

By keeping a close eye on your credit report, you can see if someone runs up a massive credit card bill or draws out credit in your name. If there is an unanticipated change, contact your bank or lender immediately. You may be able to stop a scammer from stealing someone else’s credit information.

 

4. Identity theft can affect your credit score.

Over 8 million people are victims of identify theft each year in the United States. Believe it or not, hundreds of millions of hours are spent each year trying to find the problem, halt the fraud, and wipe credit reports clean. This is yet another reason why it’s crucial to keep a close watch on any changes in your credit report.

 

5. Seven is the magic number.

After about 7 years, negative information will be eliminated from your credit report, with the exception of bankruptcy (find out how long your bankruptcy will show up on your credit report here.)

 

6. Maxing out is not as fun as it sounds.

Did you know that maxing out your credit card can lower your credit score anywhere between 10 to 45 points? Aim to keep your debt to income ratio between 28 – 33% (this means that your monthly debt and spending is no more than 33% of your total monthly income).

 

7. Closing out an account is actually a bad idea.

Are you aware that closing credit card accounts can damage your credit score? Even if you only use the card once or twice per year, keep the credit card active. Your credit score will be more positively influenced the longer you keep the account open. A longer credit history, which determines 15% of your credit score, makes you look more responsible, and will boost your score.

 

8. Five Factors

There are five factors that go into formulating your credit score, also known as your FICO score. Your payment history makes up about 35% of your score. This is why it’s so important to make all of your monthly payments on time. Responsible for 30% of your score is how much you owe, so don’t leave debt hanging on your card. Your credit history length is responsible for 15% of your credit number. Accounting for 10% of your total credit score is your last application for credit (how long ago it was, what type of credit and the amount). The final 10% is calculated based on the types of credit you use.

If you have more questions about your credit score and/or report, please check out our many other blog posts on the topic. Happy reading!