1. Everyday, new beginnings
Mehran Mobile: Business Builder
May 25, 2005
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I N S I D E T H I S I S S U E
1 Creating your own boosters
1 Rebuilding after Bankruptcy
2 What is re-aging?
Refinance
Rebuilding a financial life
Curtis Biggs
Mehran Mobile Closing
Big news!!
People often refinance to get a fresh start!
“O.K. now tell me something I didn’t know…”
Since you already know that, will it be of
greater help to your borrower to give them a
road map back to financial health? Of course.
From a purely mercenary perspective, will this
sort of guidance help you win hearts and minds?
Of course.
Your future, then, depends upon what you (and
your loan) do for your clients today, and keep
on doing tomorrow and next year.
There is a concept that says that every one
knows 250 other people and they will hear
about you for the bad or may hear about you
for good.
Wouldn’t it be great to have a client that is your
booster – some one who brings your name up to
all those 250 others – some of whom may be
able to benefit from your help.
Back on your feet after
bankruptcy
Take these steps to get a fresh start and
avoid the old mess.
May 24, 2005: 11:25 AM EDT
By Lewis Schiff, the Armchair Millionaire
Dear Armchair Millionaire: After three years of
struggling with the financial consequences of a
divorce and a six-month period of unemployment,
my sister finally declared bankruptcy a few weeks
ago. Is there any advice you can offer her about
getting back on her feet?
AA: Your sister's situation has a lot in common with
many people filing for bankruptcy these days. A
number of studies have shown that medical
expenses, job loss, divorce or a combination of
these factors are the leading reasons for personal
bankruptcy.
Members of the Armchair Millionaire community
have their own perspectives on what's behind the
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Since a refinance for many clients plays a large
part in rebuilding their financial lives - sometimes
- after bankruptcy, and because these tips can be
useful for any one rebuilding their credit report in
order to improve their credit score, I thought
having this saved somewhere might be a useful
pass along for your clients.
Another important tool for
your clients that are paying
off balances that have had
a troubled history may be:
Re-Aging.

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So, how can you re-tune your customer from the
might-talk-about-you kind to the will-talk-about-
you kind?
Well, you have to be careful because another
principle says that doing just the basic job gets a
deal, but even one shock or disappointment along
the way means you leave them with a negative
impression. In order to make a powerful enough
impression to develop boosters you have to go
above and beyond.
Create their reason to remember you.
A fresh start on credit -- without
bankruptcy
Your creditors can reset the clock on your past-due
accounts, wiping out the record of missed and late
payments -- if you're willing to do your part, too.
By Bankrate.com
For a consumer with heavy debt woes, it's a welcome
lifeline.
A creditor agrees to re-age your past-due account and
presto, your overdue credit card account gets zapped
back to current.
"It's a new life, in essence, for that account," says
Jalona Meador, manager of account management at
Consumer Credit Counseling Service of Greater Atlanta.
"It's starting the clock over."
In effect, that's what re-aging does -- allow you to start
the clock over. Say you're three months late on your
credit card payments. If the creditor agrees to re-age
your account, those three months are wiped out. Missed
payments are forgiven. Late fees stop. You still owe the
same amount of money, but you are no longer
delinquent.
You get a fresh start and your lender has one less
delinquency to report.
Getting a bright, shiny “current” status on an account is
a great opportunity, but it's not something creditors
give out lightly. Federal regulators have seen to that.
Re-aging guidelines
In June 2000, the Federal Financial Institutions
Examination Council set down new guidelines for issuers
to follow when re-aging consumer credit card accounts.
To be considered for re-aging:
• The borrower should demonstrate a renewed
willingness and ability to pay.
• The credit card account should be at least nine
months old.
• The borrower should have made at least three
consecutive minimum monthly payments or the
equivalent sum.
And there's more. Federal regulators also placed limits
on the number of times an account could be re-aged.
A creditor may re-age an account only once in a 12-
month period and twice in a five-year period for open-
ended accounts such as credit cards.
A creditor may also re-age a past-due account if you
agree to enter a debt-workout program or debt-
management plan. This revised payment plan could be
worked out between you and your creditor, or it could
be negotiated with the help of a credit-counseling
service or a debt-management company.
A creditor may only re-age an account in a workout
program once every five years.
"We're trying not to be unduly harsh on consumers, but
we want banks to accurately reflect delinquencies on
their books," says David Adkins, a supervisory financial
analyst at the Federal Reserve Board.
And creditors can be even more selective and
conservative when re-aging accounts if they wish.
"The creditors can say, 'I don't deal at all,'" says Paul
Smith, a senior counsel at the American Bankers
Association. "They don't have to re-age at all."
When to take your shot
Some creditors only give you one shot at re-aging. And
that's why it's so important to make the most of a re-
aging opportunity.
Start by taking a good, hard look at your finances. Will
you honestly be able to make on-time credit card
payments going forward? If so, how much will you be
able to pay each month?
If you can't stick with the payments, there's little use in
re-aging. Why work so hard to bring an account current
if you're only going to fall behind again in a few months?
"You don't really want to agree to this if you can't
handle the payments," says David Gelinas, president of
Family Debt Arbitration and Counseling Services in
Candia, N.H.
"Why bother if you can't stick with it? Because you're
going to be back in the same situation."
And if your creditor won't give you another chance to
re-age, the only way to bring your account current is to
pay every last penny you owe. Lots of folks can't afford
to do that, especially if they're being charged $29 late
fees every month.
If you're truly committed to making on-time payments
going forward, feel free to contact your creditor and ask
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surge in bankruptcy filings that has occurred in
recent years…
• "I think that the credit card companies are at
fault. They extend credit to anyone, allow
customers to defer payments for a year or more,
then charge 25-percent-plus interest rates. Now
those same companies wrote the law to make it
tougher to declare bankruptcy. But even
mortgage companies are at fault by encouraging
people to buy homes they can't afford, take out
home equity loans, or use interest-only loans." --
YJ
• "Chronic overspending is probably the most
prevalent and under-diagnosed addiction in
America. It seems that people can't resist the
temptation to spend, whether or not they have
the money doesn't seem to matter. Even in cases
where people declare bankruptcy due to medical
bills, they were probably too close to the debt
line and the medical bills were just the proverbial
straw that broke the camel's back." -- Chris L
People like your sister who've gone through
bankruptcy know their own reasons for doing so all
too well. More important to these folks is how to get
back on their feet. This guide provides the most
important steps.
The Armchair Millionaire's Guide to Reclaiming
Your Financial Life After Bankruptcy
Know what to expect. Surprisingly, after
bankruptcy, credit will probably not be harder to get.
In fact, many lenders specialize in extending credit to
the recently bankrupt. However, credit will be more
expensive to get (in the form of higher interest rates)
and more limited in the amount you can get.
The good news is that even though the bankruptcy
will remain on your credit report for 10 years, it will
gradually become less significant to potential
creditors as each year goes by.
Check your credit report for accuracy. After your
bankruptcy, your discharged debts should all show a
balance of zero. Check your credit report with each
credit-reporting agency to ensure that these are
properly recorded.
The three major credit bureaus are Equifax
(www.equifax.com or 888-766-0008), Experian
(www.experian.com or 888-397-3742) and
TransUnion (www.transunion.com or 800-680-7289).
Rebuild your credit history with a secured
credit card. These cards are backed up by money
that you deposit into a savings account or CD as
security. Having one will allow you to have a positive
record on your credit report while giving you the
convenience of a regular credit card.
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about curing or re-aging programs. Briefly explain why
you fell behind on payments and why you'll be able to
pay on time from now on.
Document the details
If a creditor agrees to re-age an account, ask them to
confirm the details in writing.
"I can't tell you how many times I've talked to
consumers who were promised something by creditors
that never came to pass," Gelinas says. "You hope to get
it in writing so you'll have something to show if it isn't
fixed."
If your card company won't put the details of your re-
aging program in writing, do it yourself. Keep a record of
the conversation and send a copy to your credit card
company.
Ask a customer service rep for the name and mailing
address of a supervisor. Send off the letter and then
focus on holding up your end of the bargain by making
those payments.
You'll want to be just as careful when re-aging a credit
card account through a debt-management plan with a
debt counselor or debt-management company.
When you enroll in a debt-management program, you
write a monthly check to the credit-counseling agency.
The agency pays your creditors. In a typical debt-
management program, a card issuer will charge a lower
interest rate, stop charging late fees and re-age the
account, making the account current.
Only sign on for a debt-management plan with a
company you know and trust.
A slew of credit-counseling and debt-consolidation
companies looking to make a quick buck by preying on
stressed-out, financially vulnerable consumers have
opened shop. Some companies are guilty of shoddy
service and sky-high fees. Others are out-and-out
scams.
The last thing you want to do is blow your chance at re-
aging by agreeing to an ill-advised debt management
plan or doing business with a company that's not on the
up and up.
It’s true that it does not make the payments go
away completely, but the benefit is that you may
be able to wipe out several years of late payment
history with this plan. This means an even greater
impact on increasing your credit score.
Clearly, this would be worth the time for every
account that is being paid off that has previously
had any serous late history.
Wouldn't it be great to have not only zero balances
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Join a credit union. You may find that you can get
a loan more easily and with better terms through a
credit union than through a bank.
Don't go there again. Even though credit will be
available to you after bankruptcy, use it
conservatively. Pay off your balances in full each
month. Build up an emergency fund in order to be
able to cope with the unexpected.
And don't go without health insurance -- even if it's
just a basic policy covering major medical expenses
-- so that you're not financially derailed by an illness.
THE BOTTOM LINE: Bankruptcy promises a fresh
start to the financially beleaguered. Take the right
steps to make it a new beginning to a financially
secure life.

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Join a credit union. You may find that you can get
a loan more easily and with better terms through a
credit union than through a bank.
Don't go there again. Even though credit will be
available to you after bankruptcy, use it
conservatively. Pay off your balances in full each
month. Build up an emergency fund in order to be
able to cope with the unexpected.
And don't go without health insurance -- even if it's
just a basic policy covering major medical expenses
-- so that you're not financially derailed by an illness.
THE BOTTOM LINE: Bankruptcy promises a fresh
start to the financially beleaguered. Take the right
steps to make it a new beginning to a financially
secure life.