Your bankruptcy is behind you and that light at the end of the tunnel has opened up to present life without overwhelming debt, lost sleep and fears of endless phone calls and threats from creditors. But now, the question is how to avoid future problems – including creditors who are less than ethical.
Recently, a Texas auto dealer that specializes in subprime loans for consumers was fined $2.75 million by the Consumer Financial Protection Bureau. Turns out, the accusations of missteps covered the gamut and could have affected tens of thousands of consumers. It’s not clear how many were affected and whether the possibility exists that there are others who were affected and don’t yet know it, but for those who did feel the repercussions, it’s a difficult blow.
First Investors Financial Services Group
CFPB hit First Investors Financial Services Group with the nearly $3 million fine after an investigation revealed the Houston-based dealer was aware that its computer system was sending erroneous information to the three credit bureaus. CFPB went further and said the firm knew their computer system was releasing inaccurate information, but did nothing to correct the glitches.
Among the errors:
- Underreports of how much customers were paying on their loans
- Lies about how much was past due on many accounts
- Lies about delinquency dates
- Lies about the current balances
What’s just as troubling is that these errors could result in the consumers having to pay higher interest on future loans – if they can even gain approval. CFPB Director Rich Cordray said, “When First Investors knowingly sent the wrong information to the credit reporting agencies, it put consumers with credit profiles that were already impaired into an even more perilous position.” CFPB says as many as 12 percent of the company’s customers are affected.
Other Potential Problems after Bankruptcy
As CFPB continues to sort the havoc wreaked by this unethical dealership, there are a few other tips Texas consumers with bankruptcies can employ moving forward. Most of our clients are surprised to learn that rebuilding their credit can happen faster than they’d imagined. It’s just a matter of changing the way we see money, credit and saving. When clients file a bankruptcy case with this law firm, they watch a great DVD by Dave Ramsey who gives them great ideas and thoughts on how to prevent financial problems in the future. Other tips include:
Avoiding impulse buying. In our materialistic-driven society, it can be challenging to stick to a budget and avoid impulse buying, especially as your credit scores begin to improve. Set your goals and remember the benefits of what these efforts today will present tomorrow.
Keeping your credit card balances low. It’s always a good idea to pay your credit card balance in full each month. When you’re using credit with a healthy dose of reality, it’s easier to manage.
Ensuring you have adequate health insurance. This too can be a challenge since even the most cautious consumer can still have medical costs after insurance pays its portion. Still, your budgeting efforts will likely allow for a faster payoff, which reduces the risks of unpaid medical bills
Avoid falling into the co-sign cycle. It’s difficult, but sometimes, you have to say no to a family member who needs a co-signer. Especially if you’re within that window of time after a bankruptcy that you’re rebuilding, agreeing to take on the risk can start a snowball effect if the one you’re co-signing for loses a job or fails to maintain his own obligations.
Life after bankruptcy is as good as you hope it would be, but it does take a bit of self-discipline. Just keep your eye on the ball and maintain realistic expectations. To learn more about how bankruptcy protection can help you, contact my offices today.