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Kerry Lutz
April 18, 2024
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5 Reasons not to go Bankrupt
Declaring bankruptcy might seem like a straightforward solution to overwhelming debt, but it’s a major decision with long-lasting impacts. Before opting for this drastic measure, consider these five significant drawbacks:
Long-Term Impact on Credit Score: Bankruptcy can severely damage your credit score, which affects your ability to secure loans, credit cards, and even rental housing. The effects of bankruptcy can linger on your credit report for 7 to 10 years, depending on whether you file for Chapter 7 or Chapter 13 bankruptcy.
Public Record: When you file for bankruptcy, it becomes a matter of public record. This means that anyone can access details of your bankruptcy filing, which might be concerning for those who value their privacy or are concerned about their public image, especially professionals in certain fields.
Loss of Property and Assets: In some cases, filing for bankruptcy can result in the loss of valuable assets. While there are exemptions in a bankruptcy filing (certain assets you are allowed to keep), you may still lose some personal property or real estate that exceeds these exemptions.
Difficulty in Obtaining Future Credit: After filing for bankruptcy, obtaining new credit can be challenging. Creditors may view you as a high-risk borrower, leading to higher interest rates or outright denial for credit applications. This can make it difficult to rebuild your financial standing.
Emotional and Psychological Stress: The process of going through bankruptcy can be emotionally draining and stressful. It might affect your self-esteem, relationships, and mental health, as the stress of dealing with legal proceedings and financial restructuring takes a toll.
Before making a decision, it's advisable to consult with a Fortress University, a financial advisor or a bankruptcy attorney to fully understand the implications of bankruptcy and explore all other possible debt relief options.
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It’s crucial that you fully understand these and other implications and to consider all available alternatives. At Fortress our goal is to help you get out of the red and into the black. Clients often find that when they work with us, they are able to renegotiate there outstanding debts, while raising their credit scores and returning to solvency. While there are certainly cases where bankruptcy is the best solution, many times it isn’t. Call us for a no-cost consultation and let’s find the best way forward.
Credit scores decrease for the first time in a decade as more borrowers fall behind on payments
PUBLISHED WED, MAR 6 20249:30 AM ESTUPDATED WED, MAR 6 20242:24 PM EST
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KEY POINTS
The national average credit score fell to 717, according to a new report from FICO.
Credit scores had steadily improved for a decade, but increases in missed borrower payments and rising consumer debt levels are starting to take a toll.
As of October, the average credit card utilization was 35%, up from 33% a year earlier, and the share of borrowers with a 30-day past-due missed payment against their credit accounts was also higher.
Personal Finance Tips 2023: Improving your credit score
Consumers have been increasingly relying on credit cards to make ends meet, and it may be finally catching up with them.
The national average credit score, which has steadily increased over the last decade, fell to 717 from a high of 718 in the beginning of 2023, according to a report from FICO, developer of one of the scores most widely used by lenders. FICO scores range between 300 and 850.
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“It’s a notable milestone,” said Ethan Dornhelm, FICO’s vice president of scores and predictive analytics. “This is the first time in well over a decade that the score went down.”
Couple Accidentally Gets Divorced After Lawyer ‘Clicks Wrong Button’ Using Online Portal
The error was reportedly made after the lawyers intended to complete a divorce for another couple
Updated on April 16, 2024 11:46AM EDT
A couple has mistakenly divorced after an error made by solicitors at a London law firm.
A final order for the divorce of a former couple, known as Mr and Mrs Williams, was accidentally applied for by solicitors at Vardags law firm after they “clicked the wrong button” in an online portal, according to a report.
The error was made after the lawyers intended to complete a divorce for another client “but inadvertently opened the electronic case file in ‘Williams v Williams’ ” by mistake, British judge and president of the family division, Sir Andrew McFarlane, said, per The Guardian. The divorce was finalized 21 minutes later.
Mr and Mrs Williams, who split in 2023 after 21 years together, were in the middle of sorting out financial arrangements when their accidental divorce was granted.
The solicitors realized their mistake two days later and applied to the high court to repeal the divorce — however, Judge McFarlane refused to meet their request in respect of “maintaining the status quo that it has established.”
“There is a strong public policy interest in respecting the certainty and finality that flows from a final divorce order,” McFarlane said, per The Guardian. “... Like many similar online processes, an operator may only get to the final screen where the final click of the mouse is made after traveling through a series of earlier screens.”
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Everything You Need to Know About Credit Scores — Understand how your credit score works to avoid costly mistakes.
By Casey Bond Edited by Emily Hayes
At US News and World Report
You have dozens of credit scores, but focus on the ones lenders care about the most.
Do you know your credit score? If you don't, you are not alone: Roughly 54% of Americans never check their score, according to 2020 research by Javelin that was sponsored by TransUnion.
The world of credit scores can be confusing and fraught with misinformation. Sometimes, what you assume will be good for your credit can actually lower your score – and vice versa. It might feel better to ignore your score completely.
However, taking the time to understand how credit scores work is crucial if you want a strong score. The good news is that a strong score can save you serious money over time.
What Is a Credit Score?
Whether you want to borrow money, open a utility account or rent an apartment, you're asking an entity to trust in your ability to pay your bills on time. Lenders and landlords can't call up every one of your credit card issuers since sophomore year and ask whether you're good with money. Instead, they're going to pull your credit score.
If your entire financial life could be boiled down to one number, it would be your credit score. It's a three-digit figure that represents your history of borrowing and paying back money. The higher the score, the more trustworthy you're considered to be by creditors.
Although you might scoff at the idea that your borrowing history could be reduced to a single arbitrary number, creditors take it seriously. A poor credit score could mean paying sky-high interest rates on credit cards and loans if you're approved at all. You might be asked to pay a deposit upfront to open a cellphone account.
And that dream apartment you applied for? The landlord might hand the keys to a tenant with better credit instead.
On the other hand, having a high credit score means borrowing money at the lowest rates available. You don't have to worry about losing out or paying more because you appear financially irresponsible.
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Credit Score vs. Credit Report
You might assume that a credit score and a credit report are interchangeable. Though they are closely related, a credit report and a credit score are two separate items, and understanding the difference is important.
The three major credit bureaus – Experian, Equifax and TransUnion – collect your personal and financial information and compile it all into your credit report. Credit reports detail personally identifying information such as your name, address and Social Security number, as well as open and closed credit card accounts, loans, bills in collections, liens and bankruptcies.
You're entitled to a free credit report from each of the three major bureaus through AnnualCreditReport.com, the only site federally authorized to provide free credit reports. You can check your credit reports weekly for free through the end of 2023 thanks to the extension of a program that began during the pandemic.
Using the information in your credit reports, companies will calculate a credit score that is then shared with banks, lenders and other organizations. Because there are multiple credit bureaus, you have more than one credit report and credit score.