Tuesday, November 23, 2010
"I was chopping away at my best one day, for I was anxious to get the new house and my wife as soon as possible, when the axe slipped all at once and cut off my left leg.... When I began chopping again my axe slipped' and cut off my right leg. Again I went to the tinner and again he made me a leg out of tin. After this, the enchanted ax cut off my arms, one after the other, but not daunted, I had them replaced with tin ones. The wicked witch then made the axe slip and cut off my head and at first I thought that was the end of me . . . I worked harder than ever, but I little knew how cruel my enemy could be. She thought of a new way to kill my love for the munchkin girl, and made my axe slip again, so that it cut right through my body, splitting me into two halves . . . But alas, I now had no heart, so that I lost all my love for the munchkin maiden and did not care whether I married her or not (pp. 46-47). Wizard of Oz (story of the Tin Man.)
In a case issued last week we recently learned of a decision issued by the bankruptcy court in NJ that could have far reaching ramifications for the mortgage industry. Specifically, How they collect repayments of loans. The case involving Countywide deals with an objection to a proof of claim where the the lender can not prove that the chain of title due to a failure to properly securitize the loan.
Tuesday, March 16, 2010
Chapter 13 FAQ
What is going to happen now that I filed a Chapter 13 Bankruptcy?
Since you have just filed a Chapter 13 Bankruptcy, you probably have a lot of questions! The following series of "Questions and Answers" is provided to you only for purposes of introduction and to give you some idea of what to expect. The Bankruptcy Code will determine what actually happens in your case. You need to discuss your individual concerns, legal rights, and specific questions about your particular situation and how the Bankruptcy Code will affect your case with your attorney, Mr. Skillman.
What is a Chapter 13 Bankruptcy and how does it work?
Chapter 13 is one form of bankruptcy in which you obtain relief from your creditors and submit a plan to pay your debts over a period of generally not less than 36 months and not more than 60 months. The Court prohibits your creditors from trying to collect any money or recover property from you during the time you are in your Chapter 13 plan. You must make a regular payment by Official Bank Check, Cashier's Check, or Postal Money Order to the Chapter 13 Trustee within 30 days after filing your plan and payments must be for the period of time designated in your plan. Your "first money" must be delivered to the Trustee at your first court meeting. The money collected by the Chapter 13 Trustee is disbursed to your creditors according to the plan after it is confirmed by the Court.
Where is a Chapter 13 case filed?
Your Chapter 13 petition is filed with the Clerk of the Bankruptcy Court in the (federal) District where you have lived, had your principal place of business, or had your principal assets located for the greater part of the last 180 days.
The Bankruptcy Court is a part of the system of federal courts and is a special court that was created by Congress just to hear cases and make decisions about disputes between debtors and creditors involved in a bankruptcy case.
Your Chapter 13 Bankruptcy case has been filed in the United States Bankruptcy Court for the Southern District of Indiana, Terre Haute Division. All papers may only be filed with the Clerk of the Bankruptcy Court office, addressed as follows:
Clerk of the Court
What fees are charged in Chapter 13?
The Clerk of the Bankruptcy Court charges a $274.00 filing fee when the case is filed. The standard Chapter 13 legal fee for a non-business case is $3,400 for all basic or "base fee" services. These fees are established by federal law and local court rules. Almost all additional or "non-base" fees are also paid under your plan. The Chapter 13 Trustee receives an administrative fee of up to ten percent (10%) of the amount paid under the plan.
How does the Trustee receive his fees?
Fees for the Trustee are taken only when a disbursement is made to your creditors, including your attorney. The Trustee takes a small percentage of all money disbursed. The Trustee continues to take fees until all of your creditors have been paid according to your confirmed plan. Your annual financial reports issued by the Trustee show you how much the Trustee has received to date.
Why is your Chapter 13 case number important?
At the time your Chapter 13 petition was filed, the Bankruptcy Clerk assigned you a seven digit case number. The first two digits represent the year in which your case was filed. Your case number is very important. You will need it whenever you call the Trustee's office, when you make each payment to the Trustee your case number should be clearly written or when you obtain information from the Clerk's office. Your attorney has also assigned a four digit file number to your case for his own records. You should use this number whenever you contact your attorney about your case.
Your address & employer
The Trustee and your attorney need to know your exact mailing address for as long as you are under Chapter 13. The Trustee has the address which you put on your petition, and the Trustee will send all notices and annual reports to that address until you or your attorney tell him to send them somewhere else. If you ever move or change your mailing address, you must INFORM your ATTORNEY, the COURT, and the TRUSTEE in WRITING of your new address. The Trustee also needs to know your current employer's name and address.
"My friend went through bankruptcy and he says..."
You have probably already received or will receive advice on what to do from well-meaning friends and relatives who have themselves experienced financial problems. Just like no two people are alike, no two "Chapter 13 Bankruptcies" are alike. Take the advice of your well-meaning friends and acquaintances with the proverbial "grain of salt." If you have a specific question about anything related to your bankruptcy, make it your rule to ASK YOUR ATTORNEY, and he will try to provide you with an answer that applies to your special situation.
What should I expect my attorney to do in a Chapter 13 Bankruptcy?
Exactly what you may expect of your attorney will be governed by the fee agreement the two of you have made and that has been filed with your case. Under the rules of the Bankruptcy Court, your attorney must continue to appear and represent you until the judge permits your attorney to withdraw from your case. Any attorney may only withdraw from a case for "good cause" after proper notice to you.
Your attorney's function is to aid and assist you in successfully completing your Chapter 13 plan. Your attorney is there to answer any questions or concerns regarding your plan and the legal consequences of your case. Remember, your attorney is your legal advisor, not the Trustee. The Trustee and his staff are not allowed to give you legal advice regarding your case.
What may I expect from the Chapter 13 Trustee?
The Chapter 13 Trustee offices are open five (5) days a week, Monday through Friday. Mr. Decker maintains office hours from 9:00 a.m. to 5:00 p.m. The Trustees follow the federal holiday schedule. The Trustee's main function is to administer the funds received from you. If you have a question about your plan's receipts and disbursements, you may wish to call the Trustee's office. Trained phone service representatives are available during office hours to answer your questions.
The Trustee is not able to talk with you personally about your case. His staff is familiar with the policies and guidelines of Chapter 13 and is well qualified to discuss with you any problems you may have implementing your plan. Remember, however, that the Trustee and his staff cannot and will not give you legal advice.
When will I have to appear in court in a Chapter 13 case?
In the United States Bankruptcy Court for the Southern District of Indiana, you will have to appear for at least one court hearing generally known as the First Meeting of Creditors. This meeting is conducted by the Chapter 13 Trustee. The bankruptcy judge will not be attending this meeting. This meeting will be held within 30 to 45 days after your case is filed. You will be notified of the time, date and place of this hearing by your attorney and by the Trustee. This is a mandatory court appearance on your part. Your failure to appear at this meeting will result in the dismissal of your Chapter 13 case.
Confirmation hearings (i.e., final approval of your plan) are handled by your attorney and the Chapter 13 Trustee.
May I change to Chapter 7 if my Chapter 13 case is still open?
Yes. A Chapter 13 case may be converted to a Chapter 7 case at any time. You should contact your attorney if you are considering converting your case. Additional legal and court fees must be paid before a case can be converted to Chapter 7.
What effect does filing under Chapter 13 have on lawsuits and attachments previously filed against me?
Under federal law, the filing of a Chapter 13 case automatically stops or stays all lawsuits, attachments, foreclosures, garnishments, repossessions, and other actions by creditors against either you or your property. A few days after your case is filed, a notice is mailed by your attorney and by the Trustee to all of your creditors advising them of this automatic stay. The creditors may be notified sooner by either you or your attorney if necessary.
Since you are now protected from your creditors under the Federal Bankruptcy Laws of the
If you receive any verbal or written demands from creditors more than two weeks from the date your case was filed, please notify your attorney. If the contact is by telephone, then you need to obtain the telephone number of the person calling you, the name of the creditor or the collection agent, the mailing address for such party, the name of the person who called you, and how much money they want you to send. The best way to get this information is to "act stupid" and "be nice." If the contact is by mail, then you need to save the envelope for proof of the postmark date. You should notify your attorney of any such contacts.
Please note that creditors who contact you after being advised of your bankruptcy case are subject to various sanctions for contempt of Court and other violations of Federal Law. In many cases, the Bankruptcy Court will order such creditors to pay money damages to you (including legal fees to your attorney) for such violations. Your attorney always takes these cases on a contingency fee arrangement as set forth in the fee disclosure agreement. In short, unless your attorney recovers money damages from these creditors you will not owe him any additional legal fees for pursuing these type claims. Please be assured that the Bankruptcy Court takes these matters very seriously and that they are vigorously pursued by Mr. Skillman.
Will my creditors be able to take my wages or property while the Chapter 13 case is in effect?
No. The automatic stay described in the previous question remains in effect during the entire Chapter 13 case and your creditors will not be permitted to take or otherwise proceed against any of your property or assets, including your earnings. However, if secured creditors to whom you are in default are not being paid under the plan or if you are not making your direct home mortgage payments, these creditors may go to the Bankruptcy Court and seek permission to repossess the property upon which they have a valid lien. Creditors secured by vehicle loans may also have your vehicle stored if you fail to maintain insurance on the vehicle securing the loan.
There are some exceptions to this general rule. The most common being child support, income tax refunds and certain property tax situations. For example, the IRS may apply your tax refund against any taxes included in your plan. The IRS must notify the Trustee of this action, but it is otherwise lawful. Specific questions regarding your situation and whether these exceptions apply to your case should be discussed with your attorney.
May I repay some of my creditors and not others under Chapter 13?
You cannot selectively "pick and choose" some particular creditors and decide to pay them "on the side." All of your debts must be dealt with through the Court. Any payments which you make to a creditor must be paid under the authority of the Court, by the terms of the law, and not by any personal desires. If you want to pay creditors, you must do so through your Chapter 13 plan.
Are student loan debts dischargeable?
Most student loans are not discharged in bankruptcy. You should refer more specific questions to your attorney.
How are debts that have been co-signed or guaranteed by another person handled under Chapter 13?
If a consumer debt which has been co-signed or guaranteed by another person is being paid off in full under the Chapter 13 plan, the automatic stay that was entered when the case was filed will prevent the creditor from collecting the debt from the other person. However, the creditor may ask the Court's permission to collect from the other person the portion of the debt that is not being paid off under the plan.
The Trustee will only pay in full those co-signed debts that are specifically provided for in your plan. Please call your attorney if you have any questions.
What is required for court approval of a Chapter 13 plan?
The Court will confirm a Chapter 13 plan if:
- (a) the plan complies with the requirements of Chapter 13 generally;
- (b) all required fees, charges, deposits and payments have been made;
- (c) the plan has been proposed in good faith;
- (d) each secured creditor is allowed to retain his lien on his collateral and is paid the full amount of the secured claim under the plan;
- (e) each unsecured creditor will receive under the plan at least as much as the creditor would have received if you had filed a Chapter 7; and
- (f) it appears that the debtor will be able to make the required payments and to comply with the plan.
What if the court does not approve my Chapter 13 plan?
If the Court does not confirm the Chapter 13 plan you have proposed, it will usually state the reasons for such disapproval so that the plan may be appropriately modified, amended, converted to a Chapter 7 or dismissed. Once a case is dismissed, your creditors may again pursue the collection of your debts. Mr. Skillman will not file a Chapter 13 case unless he is very confident the plan will be approved by the Court.
When must the Chapter 13 payments begin and how often must they be made?
Mr. Decker will send you a very important letter shortly after your case is filed with payment instructions. Please follow his direction exactly as he has them listed. If you have questions call Mr. Skillman for clarification. A first payment must be made to the Chapter 13 Trustee within thirty (30) days of filing your bankruptcy plan. This payment should be paid by you. After the first meeting, your plan payments should be sent only to the Trustee's payment address. Be sure to keep the receipt for each payment. If your case is up for a motion or hearing in court, please give your attorney a copy of the payment receipt to prove the payment. Do not send your payments to the Clerk of the Bankruptcy Court or to your attorney.
All payments must be in the form of bank money order, postal money order or cashier's check. Be sure to include your name, address, and your bankruptcy case number on the money order or check. The Chapter 13 Trustee's office cannot accept cash payments or personal checks.
Payroll deduction orders
You may find it easier to have your employer deduct your plan payments from your paycheck. This will likely be done automatically for you after the first payment. You should check your pay check to see when these payments begin. It is important that both you and your employer understand that such an order is not a garnishment. If your employer has any questions, he or she should contact your employer's legal counsel. Be sure to notify the Trustee if you change or terminate your employment.
What if I am temporarily unable to make my Chapter 13 payments?
It is very important to contact your attorney if you ever expect to miss a payment due to layoff, medical disability, etc. If you are temporarily out of work, injured, or otherwise unable to make the payments required under the Chapter 13 plan, the Court may upon proper application allow you to suspend payments for a period of time. If it appears that your inability to make the required payments will continue for an extended period, you may be permitted to amend your plan, or the case may be dismissed or converted to Chapter 7. Remember -- the Trustee's office has no authority to let you miss a payment or allow you to pay less than your plan requires. Only the judge can make such a decision. Your lawyer can ask the judge to change the requirements of your plan if you feel that you cannot meet the obligations of your plan.
May I make a higher payment than is required under the plan?
If you are ever in a position to increase your plan payments to the Trustee, you should contact your attorney for advice on prepaying your plan payments. You may send extra monthly payments to the Trustee, however, at any time. If you want to simply pay-off your plan early you may do so but call your attorney first.
What if I later decide that I no longer want to make payments and to continue with the Chapter 13 plan?
Federal bankruptcy law allows the debtor to either dismiss a Chapter 13 case or to convert it to Chapter 7 at any time, unless your case has previously been converted from another chapter of the Bankruptcy Code. No one can force you to remain under a Chapter 13 plan if you do not wish to remain. If you desire to stop your case, contact your attorney.
However, if you simply stop making the Chapter 13 payments, any creditor in your case may ask the Court to dismiss your case. The Trustee will ask the Court to dismiss your case or place you on payroll deductions if:
- you fail to make your first payment(s)at the First Meeting of Creditors; and/or
- if you fail to make your required payments regularly during any months of your plan.
You should understand that a dismissal will reactivate all unpaid or disputed debts, all interest, finance charges, legal fees, all late charges not allowed by the Bankruptcy Court, and all debts of creditors who did not file their claims. Consider also that you will be forced to deal with those creditors on their terms, not yours or the Court's.
If a hardship occurs that makes payment impossible or extremely difficult, you may qualify for a hardship discharge. Please contact Mr. Skillman for details.
How do I find out how much is owed to creditors under my plan?
The Trustee's office will send you a yearly report of what has been paid to all your creditors. Be sure to review this report carefully and contact your attorney immediately if you have any questions or concerns. The report will list the creditor's claim amount and the amount paid to date to each of your creditors. The balance due on your plan is noted at the top of the report. Also, it is possible that one or more of your creditors is receiving interest and therefore the balance will change from month to month. The balance due is, therefore, only an approximate figure.
How are the claims of creditors handled under Chapter 13?
Unsecured creditors must file their claim with the Chapter 13 Trustee within 90 days after the first date set for the First Meeting of Creditors in order for their claims to be allowed. Government agencies have 180 days from the date of filing to file their claims. If an unsecured creditor fails to file their claim within this time period, the Trustee will bring a motion objecting to the late claim. If the claim is disallowed or not filed, then the creditor will not be paid by the Trustee and the debt will be discharged or canceled upon the completion of the plan.
A secured creditor can file a claim at any time while your case is open. A creditor must file a claim in order to be paid. The Trustee pays the amount claimed by the creditor, not the amount you state in your petition. If you disagree with the creditor's claim amount, you should contact your attorney. The debtor may file a claim on behalf of a creditor if he or she wishes to do so. A creditor may file an amended claim increasing or decreasing the claim amount at any time.
How are creditors paid?
The money which you pay to the Trustee is used to pay expenses of administration, including payments to your attorney, and payments to your creditors. So that you will have some idea as to how the creditors are paid, you should understand that there are three (3) basic types of claims: priority (such as tax claims), secured (holding liens on property) and unsecured (consumer debt with no liens on property). Generally, your Trustee will pay secured creditors first, then administrative costs, then priority and finally unsecured.
What happens to creditors who were not listed on my schedules?
Creditors not listed by you when you filed can create some potential problems. There are two (2) kinds of unlisted creditors: those who were owed money at the time of your filing but were forgotten ("unlisted creditors"), and those creditors who have a bill that was incurred after you file ("post-petition creditors"). If you find an unlisted creditor, you should let your lawyer know the details immediately.
What if I don't agree with how much a creditor is receiving?
The Trustee pays creditors the amount listed on their proofs of claim. If you disagree with the amount a creditor claims you owe then contact your attorney.
Can I incur new debt after I file my Chapter 13 plan?
You may find yourself in a situation where you need to incur additional debt after you have filed your Chapter 13 plan. The following are the guidelines on incurring additional credit provided by the Bankruptcy Code:
- the debt must be for consumer debt and "for a property or services necessary for the debtor's performance under the plan";
- you must be able to prove you have the ability to pay the debt; and
- the Court must approve or deny such additional credit. Court approval requires the filing of a motion and notice to your creditors. If you wish to secure such credit, contact your attorney.
Will a Chapter 13 bankruptcy affect my credit rating?
Your credit rating during and after completion of Chapter 13 will ultimately be based upon the personal opinion of any credit-grantor who looks over your credit record. Your credit record is a record of all your past credit performances. This record is made available to a creditor, and he or she makes up his or her own mind, by his or her own standards, as to whether or not he or she wants to grant credit to you.
Your bankruptcy will remain on your credit report anywhere from 7 to 10 years, depending on the credit reporting agency's policy. The maximum time it can be reported is 10 years.
What happens when all payments have been completed?
Once enough money has been paid to the Trustee to complete all of your required payments, the Trustee will begin the process of closing your case. The closing process normally takes 6 to 8 weeks and is completed in the following order:
- Court Audit. The Trustee's office verifies that all claims filed in your case were paid correctly and all court orders were property administered. If any problem is discovered, you and your attorney are notified.
- Stop Payment. The Trustee's office directs you or your employer to stop making plan payments. This will not be done until after the court audit is completed successfully.
- Final Report. The Trustee's office prepares a final report for the judge.
- Court Date. The Trustee schedules your case for final review by the judge. You do not have to appear for this final hearing.
- Case Discharged. The judge signs an order discharging you from your scheduled debts.
- Notice of Discharge. The Trustee sends a notice to you, to your attorney and to your creditors. This tells you when your case was discharged by the judge.
- Refund. After the judge discharges your case, you receive a refund from the Trustee if there is money remaining in your case.
How do I inform the credit agencies of my Chapter 13 completion?
You and your attorney will both receive copies of the discharge order. Approximately four to six weeks after the judge has discharged your case, your discharge papers will also be available at the courthouse. This legal document states that you have been discharged from your scheduled debts. The Trustee will not have copies of your discharge papers. The courthouse is located at:
901 Ohio Street
If you subsequently lose or misplace your discharge order, you may obtain a certified copy from the court. However, the Bankruptcy Court does not take requests for copies over the phone. Requests may be in writing in care of the correspondence department or made in person. If you go in person, you must have your bankruptcy case number, picture identification and money (50 cents per page) for photocopies.
Make several copies of your discharge papers, and send copies to the three major credit bureaus:
TRW Consumer Assistance
P.O. Box 2350
Chatsworth, CA 91313-2350
Transunion Credit Information Co.
c/o Consumer Relations
8200 E. 32nd Street N.
Wichita, KS 67226
(312) 408-1050 for information
P.O. Box 105873
Fax (404) 612-3150
Where do I obtain title to my property after completion of my Chapter 13?
When a creditor has had his claim paid by Chapter 13, whether partially or in full, he should, and usually does, send the "paid-in full" papers to you. Contact the creditor holding title, not the Trustee's office, to obtain your titles. If you have any problems, contact your attorney. Creditors who refuse to deliver titles may violate the bankruptcy laws.
What does the Chapter 13 Trustee expect of me?
The Trustee expects you to be cooperative and truthful. He also expects you to ask questions when you do not understand any aspects about the administration of your case. Please notify him promptly whenever you change your address, telephone number, or employment status. Do not incur new debts, sell any property or enter into any leases without the court first approving it. Finally, the Trustee expects you to handle your payments in a prompt, regular and business-like manner.
Wednesday, July 01, 2009
In a release dated November 2007, the Lt Governor of Indiana (not related to this writer) announced the creation of the Indiana Foreclosure Prevention Network. Since its creation date It has released 3 more press releases and acted as a host to several "events." Most significantly the "partnership" had been touting a relationship with Momentive Credit Services to arrange for personal telephone consultations to assist with Debt analysis and options. Effectively, the callers were getting bankruptcy counseling as required by the BAPCPA. The Network has two web sites that I have found thus far. The official site is here. However, there is another site with Video clips of public service ads here. On a lark, I called the Number for my district and was placed into a phone tree where I was told that there were 4 calls ahead of mine and I would have to wait. I quit waiting after 5 minutes.
WELL that was then, and this is now. On June 30, at 5 pm a new service went into effect. The organization is being spear-headed by Kim Harris, a former bank officer with approximately 30 years of lending history and know how. I was very impressed with his knowledge of the lending practices of the likes of Bank of America and his familiarity with the messages that Hope Now has been telling people about the feasibility of loan modifications. In short, the new programs has incentives built in to obtain well trained counselors and who will be compensated for the completion of various stages of counseling services including loan modification where possible. To be certain, they will be looking to other options for families where there is no income, but, overall, it appears that the program will be locally based, at least state centered, and fully staffed by individuals with incentives to make loan modification work.
I will try to check back on this topic to see how well the new plan is implementing its stated strategy.
Monday, June 29, 2009
I have to tell you that I have heard on more than one occasion people suggest to me that they are qualified to prepare and file their own bankruptcy. I have to smile politely and suggest that perhaps they are able to do so. Inwardly, I am thinking, of a tale told to me by my mentor when I started practicing law.
Mel said to me, "What we do in some cases is not the most difficult or complex work; in some cases it is little more than common sense." But, there is a reason it is wise to use legal representatives. Mel said, "A surgeon can teach anyone to take out a spleen or appendix, but the reason you need a surgeon is to deal with what happens when there is a variation." The skill of the surgeon is in avoiding the complications, not the completion of the appendectomy. Wise words indeed.
Here is a link to the bankruptcy forms. Any fool can try to complete them. There are serious consequences for failing to complete them properly which could include throwing your case out, at a minimum or throwing the filer in Jail, as a maximum penalty. Adding to the problem is that there are attorneys that do not know how to fill out these forms either. A person should not accept representation from anyone who has not prepared and filed at least 25 bankruptcies. A good rule of thumb is to look for an attorney who is a member of the NACBA, National Association of Consumer Bankruptcy Attorneys, and/or the ABI, American Bankruptcy Institute. Many clients claim that they do not know how to find an attorney with a good reputation for bankruptcy, but the local bar association will often act as a good resource.
SO.... Can a person save money by filing their own bankruptcy? The answer is YES, in the same manner that you can save money by doing your own brain surgery. You may save money in the short term, but it may cost you big time in the long run.
This quick post is to provide an update. At this point My clients have filed approximately 56 Suits, at no costs to the client. At a minimum, the clients netted $1,250.00 and one client will receive a pay out of about $20,000.00! I currently have 13 other suits pending. The approximate pay out to all clients combined is about $75,000.00!!
Thursday, June 11, 2009
What about fighting a foreclosure without filing bankruptcy?
From time to time I have clients who have maintained great payment practices with their creditors but still have an arrearage on their home mortgage. In many cases these arrearages have occurred due to the mortgage company turning back payments, or directing the home owner to "hold" payments while a modification was being attempted.
As many know, the primary method for saving the home is to file chapter 13 bankruptcy and submit a plan to cure the arrearage over time and reinstate the loan upon completion of the chapter 13. That is a perfectly acceptable method to fight foreclosure, but what about folks who don't want to file a bankruptcy or don't have many other debts which might make the decision to file more palatable.
There are many defense and counter-claims that might be brought against a foreclosure action. It might be helpful to talk to an attorney about your options before an action is filed against you. Recently we have seen many cases of Truth in Lending Act ("TILA") violations and RESPA violations which can lead to getting a house out of the Foreclosure Track an into a position to reach a more beneficial modification agreement with lenders.
Tuesday, April 07, 2009
I suggest that you take this link and check them out. They also serve as a good reminder for those who have been through it all before.
Thursday, September 18, 2008
Credit score do’s and don’ts
Credit scores impact our lives in ways most of us never realize. It forms the basis for rates on home owners and auto insurance, loan repayments and even customer service categories (I am not sure what that might be).
The basis for credit scores are generally not revealed to the public for a number of reasons, mostly, because they do not want consumers modifying their behavior to conform to an assessment category. But there are some things one can do to help. Below, I have paraphrased the work of excellent writer, Liz Weston at MSN Money. You can find her complete article right here. In this article she tells all of the issues that you might want to consider for helping to get your credit score up to the best possible level.
"Now you're ready to take the seven steps to speedy credit repair:
1) Pay down your credit cards. Paying off your installment loans (mortgage, auto, student, etc.) can help your score, but typically not as dramatically as paying down -- or paying off -- revolving accounts like credit cards.
The credit-scoring formulas like to see a nice, big gap between the amount of credit you're using and your available credit limits. Getting your balances below 30% of the credit limit on each card can really help.
2) Use your cards lightly. Racking up big balances can hurt your score, regardless of whether you pay your bill in full each month.
What's typically reported to the credit bureaus, and thus calculated into your score, is the balance reported on your last statement. (That doesn't mean paying off your balances each month isn't financially smart -- it is -- just that the credit score doesn't care.) You typically can increase your score by limiting your charges to 30% or less of a card's limit.
3) Check your limits. Your score might be artificially depressed if your lender is showing a lower limit than you've actually got. Most credit-card issuers will quickly update this information if you ask.
4) Dust off an old card. The older your credit history, the better. But if you stop using your oldest cards, the issuers may stop updating those accounts at the credit bureaus. The accounts will still appear, but they won't be given as much weight in the credit-scoring formula as your active accounts, said Craig Watts, an executive at Fair Isaac & Co., one of the leading credit scorers.
5) Get some goodwill. If you've been a good customer, a lender might agree to simply erase that one late payment from your credit history. You usually have to make the request in writing, and your chances for a "goodwill adjustment" improve the better your record with the company (and the better your credit in general). But it can't hurt to ask.
6) Dispute old negatives. Say that fight with your phone company over an unfair bill a few years ago resulted in a collections account. You can continue protesting that the charge was unjust, or you can try disputing the account with the credit bureaus as "not mine." The older and smaller a collection account, the more likely the collection agency won't bother to verify it when the credit bureau investigates your dispute.
7) Blitz significant errors. Your credit score is calculated based on the information in your credit report, so certain errors there can really cost you. Here's the stuff that's usually worth the effort of correcting with the bureaus:
Late payments, charge-offs, collections or other negative items that aren't yours.
Credit limits reported as lower than they actually are.
Accounts listed as "settled," "paid derogatory," "paid charge-off" or anything other than "current" or "paid as agreed" if you paid on time and in full.
Accounts that are still listed as unpaid that were included in a bankruptcy.
Negative items older than seven years (10 in the case of bankruptcy) that should have automatically fallen off your report.
You actually have to be a bit careful with this last one, because sometimes scores actually go down when bad items fall off your report. It's a quirk in the FICO credit-scoring software, and the potential effect of eliminating old negative items is difficult to predict in advance.
Some of the stuff that you typically shouldn't worry about includes:
Various misspellings of your name.
Outdated or incorrect address information.
An old employer listed as current.
If the misspelled name or incorrect address is because of identity theft or because your file has been mixed with someone else's, that should be obvious when you look at your accounts. You'll see delinquencies or accounts that aren't yours and should report that immediately. However, if it's just a goof by the credit bureau or one of the companies reporting to it, it's usually not much to sweat about.
Two more items you don't need to correct:
Accounts you closed listed as being open.
Accounts you closed that don't say "closed by consumer."
Closing accounts can't help your score, and may hurt it. If your goal is boosting your score, leave these alone. Once an account has been closed, though, it doesn't matter to the scoring formulas who did it -- you or the lender. If you messed up the account, it will be obvious from the late payments and other derogatory information included in the file.
4 other credit mistakes
actions to beware when you're trying to improve your score:
Asking a creditor to lower your credit limits. This will reduce that all-important gap between your balances and your available credit, which could hurt your score. If a lender asks you to close an account or get a limit lowered as a condition for getting a loan, you might have to do it -- but don't do so without being asked.
Making a late payment. The irony here is that a late or missed payment will hurt a good score more than a bad one, dropping a 700-plus score by 100 points or more. If you've already got a string of negative items on your credit report, one more won't have a big impact, but it's still something you want to avoid if you're trying to improve your score.
Consolidating your accounts. Applying for a new account can ding your score. So, too, can transferring balances from a high-limit card to a lower-limit one, or concentrating all or most of your credit-card balances onto a single card. In general, it's better to have smaller balances on a few cards than a big balance on one.
Applying for new credit if you've already got plenty. On the other hand, applying for and getting an installment loan can help your score if you don't have any installment accounts, or you're trying to recover from a credit disaster like bankruptcy. "
50 ways to trim your budget- really?
Well yea, It turns out that trimming the budget is a pretty good idea when money is tight.
I am attaching this link to a MSN Money site that make some good suggestions about how to make your Dollars Stretch further.