Many people who consult with a bankruptcy attorney in Nassau & Suffolk Counties find that their options are far greater in scope than they might have imagined.  The reason for this is that part of a bankruptcy attorney’s job is to ensure that filing for chapter 7 or chapter 13 bankruptcy protection is the right choice for you.  Whether the decision that is made is to forge ahead with the bankruptcy proceedings, or to avoid it altogether, there are a number of resolutions that you can make for the New Year to better your financial situation. 

 

One of the most important aspects of your financial life is the maintenance and, where necessary, the repair of your credit.   Good credit is crucial regardless of whether or not you have a recent bankruptcy discharge.  Your first step should be to gain access to your credit report via www.annualcreditreport.com.  This website was setup after legislation mandated that each United States citizen be provided with a copy of their credit report for free, once per year, per credit reporting agency.  Examine your report, and check for any errors contained within.  If there are errors, contact your creditor and the credit reporting agencies to correct the information immediately.

 

Recent changes to credit laws have substantially benefitted consumers.  Knowledge of these changes will help you to better manage and understand your credit.  Primarily, two of these changes will impact consumers immediately upon taking effect.  The first is that interest rates will no longer be allowed to be raised on current balances.  New balances and purchases may be charged higher rates, provided that you have been given at least 45 day’s notice prior to such changes taking effect on your account.  However, balances that you already have must remain at their current rate.  The second change is related to payment allocation.  Previously, creditors used your payments to pay down the balances of your account that are at the lowest interest rate first.  Because different transactions have different interest rates, this meant that balances at higher rates accumulated the higher interest for much longer than any other balances.  The new regulations passed at the end of 2008 require that the opposite be done: beginning in 2010, payments must be allocated to balances with the highest interest rates first.  Take advantage of this!

 

As part of your New Year’s resolution, build a complete budget for your household.  Include all expenses- from car payments to tanning fees, clothing to utilities; make sure you account for everything.  Start by examining and compiling data on all your income sources.  When you subtract your expenses from your income, you will understand what your disposable income is.  If there is no disposable income, you should seek the advice of a financial advisor or a consumer credit counseling service.  However, if there is disposable income, you should use it to invest in savings, or to pay down high interest rate loans and lines of credit. 

This entry was posted on Friday, January 9th, 2009 at 7:00 am and is filed under General Information, Long Island Bankruptcy, Nassau & Suffolk County. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.