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Credit After Bankruptcy: A Book Review

11/09/2008

This is a book that I have really been looking forward to reviewing. I am very glad that I finally got the chance.

Just after I declared bankruptcy, I was researching ways to repair my own credit, and I ran across Stephen Snyder’s website. He is the author of this book, “Credit After Bankruptcy” and he has an excellent series of free newsletters that I made good use of when I began my own journey of recovery.

At that time I didn’t consider ing and reading the book that went along with the emails though. So, I was very happy to find it on the list of used books available on Amazon.com. Although the book does contain some of the same information mentioned in his emails, there was quite a bit of entirely new information too. Here are a few of the highlights:

Snyder Begins the book with a laundry list of some historical, and very famous people who have all declared bankruptcy.

Well, I was a bit encouraged by the list…after all it seems past bankruptcies do not always prevent future success..at least, if the names on that list are any indication. I know that I very much want to be successful. I don’t want to live my life they way I did before my bankruptcy. So any bit of knowledge that I can understand, and put into practice, is very valuable to me.

Happily, this book was full of knowledge. Better yet, it was easy to read, and I am betting that it will be easy enough to actually use the information that it gives.

Chapter 1: The story of Stephen and Michele.

Their bankruptcy was caused by living beyond their means. Stephen changed jobs, which reduced their income, but they kept right on living they way that they had always lived. Even though they no longer had the income to support their lifestyle.

They did not file their bankruptcy jointly, as my husband and I did. Instead Stephen’s wife Michele filed first, using a lawyer, and Stephen filed shortly afterwards on his own, with no legal representation. They quickly made, and quickly broke the resolution to never use credit again. They made several other resolutions though, and they did manage to keep those. Some of the foremost resolutions included:

They did make good on their other resolutions, and this book is the story of how they did it. It did turn out to be a good thing for them that they returned to using credit as quickly as possible. The Snyder’s were able to have a much better quality of life faster than if they had returned to cash only. This is 100% because they managed their credit correctly though.

I do not believe that it is advisable for everyone who is fresh out of a bankruptcy to begin using credit immediately. Especially if credit cards are what led you to bankruptcy in the first place. From my own experience, I think that a return to using credit should only happen when you reach the level that Stephen and Michele did – when you understand completely how it works, and how to help yourself (instead of hurt yourself) by using it.

Chapter 4: Why Re-establishing Credit is Important

I skipped chapters two and three here because they dealt with the Snyder’s qualifications to teach about bankruptcy recovery, and a definition of what bankruptcy is. Chapter 4 went into a lot more detail about why you should work hard to raise your credit scores again once your bankruptcy has been discharged. Stephen presents a six step strategy for bankruptcy recovery. These are good sounds steps, and they would probably benefit a lot of people who have not yet declared bankruptcy, or are in dire financial straits.

  1. Make Life Changing Decisions about how you handle your money –Decide exactly what your problem with managing money is, work to fix those problems, and then make a new plan of action.
  2. Strategically Go Into Debt Using Mainstream Lenders – This is the part I have the most problem with, even though I know it is necessary in order to rebuild my credit. After my bankruptcy, I didn’t want any more debt. Even if it was “helpful debt”. So, while I choose to have and maintain credit accounts, I typically borrow as little as possible, and never more than I can pay back within a month’s time.
  3. Commit to Paying Your Bills Early – This does help avoid getting new black marks on your credit report, and it is an essential step towards rebuilding credit. There are months when I may make several payments on my credit cards. I do this partly because I know how important not making late payments is, but also because it ensures that I do not carry a balance on my cards from month to month. After my own BK experience, I figured it was better to be overzealous when making payments, than to not pay enough attention.
  4. Become Debt Free – Well bankruptcy pretty much wipes out nearly all debts, so it goes a long way toward making you debt free. Also included in this step is learning to live within your means by actually living on less than you make. That’s pretty much some of the best financial advice ever, and I was glad to see it come up in this book – a book that is completely about using credit again after your bankruptcy!
  5. Repair Your Credit – This is the point where you strategically take on new loans, and correct any mistakes on your credit report. Snyder also warns that this step is not free!
  6. The sixth step is considered optional, but Snyder advises paying back the debt that you declared bankruptcy with. – I think this would be a very healing thing to do. I hope that some day I can afford to do that.

While these are the basic steps for success (and they are repeated throughout the book) I found a literal ton of examples, and advice that I believe will help me in the future.

Besides bankruptcy recovery tips, Snyder included specific questions to ask your future lenders, the best way to finance a house and a car after bankruptcy, and a specific formula that lenders use when deciding whether or not to give you a loan. All of which was invaluable. But the real surprise, and the thing that I liked most about this book was that there are several large sections on personal development.

I think that when you have a mistake as large and looming as bankruptcy, it’s probably wise to spend some time on personal development. At least, I have found that to be true in my own life. The more I read, and the more I expose myself to the knowledge of those who have walked the same path, the easier it is for me to change my own bad habits.

I do place one caveat on this book: It is the personal story of Stephen and Michele Snyder. To some degree, what worked for them can work for me or you. However, it is just one story. It is not a far-reaching, all-encompassing story, it is their story. So please, take the advice given with that grain of salt. They understand the situation far better than someone who has not been through bankruptcy, but their words are definitely colored by their own experiences.

I would definitely recommend this book to anyone who has declared bankruptcy. If for no other reason than after you read it, you will have a little more hope than you did before. You are not alone. I am out here, recovering, and they Snyders, they have recovered too. It’s never an easy thing, but it can be done. And Stephen has given us a clear road map with markers that show us the fastest, and easiest methods of recovering from a bankruptcy.

If you are going to this book, or check it out from the library, I recommend checking it out along with The Complete Guide To Credit Repair.

This is because the Snyders recommend using a company to help clean up your credit report (which is expensive!) and the Complete Guide to Credit Repair shows you how to do it on your own. I think right now you can get them both used, on Amazon for under $10. Or better yet, for free from the library!

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1 Comment
Surbhi
November 9, 2008 @ 7:30 pm

Hello,

I have been searching your website. Our debt at the moment amounts to about 66% of our salary. We are so far current with all our cards but are finding it increasingly difficult to pay minimums. Also all of the minimums are going towards interest only, so making those payments is of no use.

I was thinking of going to a credit reduction plan when I came to your site I have the following questions. I intend to call all my companies to see if they will reduce my interest. How low should I request the interest to go before I accept. Can I request them to take out late payments for the past year or is it limited to the month you are calling?

Also can they recalculate your interest for past months on a lower interest rate, Is it something that consumers can ask for? Or is it limited to that month only?

Also to expedite the payment can you fix a minimum for the months coming and the dates for it as well.

I really would like to solve this problem on my own. I find it rather unnerving that I have to go through a credit company and give them any sort of power of attorney.

Thanks
Surbhi

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