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A helpful tool to repair your credit after filing for bankruptcy

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Q: Can you offer any suggestions on how to repair your credit rating after filing for a personal bankruptcy?
R.F.P., via e-mail

A: Jordan E. Goodman, a nationally recognized expert on personal finances and author of "Everyone's Money Book," offers this simple postbankruptcy maneuver: a secured credit card. You put up $500 or $1,000 and in return you'll get a line of credit worth as much. After 18 months of paying on time, you can graduate to an unsecured card.

Mr. Goodman suggests that during this period you carefully monitor your credit report and score to see if you're making progress in rebuilding your credit. His favorite website for this is www.guardmycredit.com, which goes to the Equifax Creditwatch system.

Goodman has put a list of the best secured cards on his Credit Card Optimizer Kit at www.moneyanswers.com.

Q: I haven't deducted contributions to my IRA in the past as I understood this was not allowed if I participated in a retirement plan at my place of employment. I am now retired. As I no longer contribute to the employer-run plan, does the IRS still consider me to be a "participant" and still not eligible to deduct my IRA contributions?
C.B., Lansing, Mich.

A: You have to meet certain conditions to contribute to an IRA after retiring, says Joyce S. Mills, a certified financial planner in Boston. First, you have to have what is called income, which includes wages, salaries, commissions, tips, self-employed income, bonuses, and alimony.

Income that would not be considered earned for IRA purposes includes Social Security, pension and annuity payments, and investment income.

In addition, to make a contribution to a traditional IRA, you must be under age 70-1/2 in the year you make the contribution. You can always make contributions to a nondeductible IRA (contributions are after-tax and growth is tax-deferred). But Ms. Mills says a Roth IRA is usually preferable if you can meet its income requirements, since its growth and later withdrawals are tax free. And a Roth doesn't have that 70-1/2 age limit.

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