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Chapter 13 and the aftermath

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  • Chapter 13 and the aftermath

    I am new to this site and am so glad I stumbled upon it. My husband and I filed back in 2014 and our last payment is later this year. I have questions since the lawyer we used doesn't seem to have too many answers.
    We have been making timely mortgage payments and just turned in our leased vehicle (also timely payments). I want to start building credit but not sure which is the best way. We've been told a secured credit card but not until after discharge, since any payments made during the bankruptcy "don't count" towards increasing our credit score. Tried to lease/finance a new vehicle 4 months ago, but the dealership ran my credit and told me that I have a zero as one score, and the others are in the high 500s. They also told me that there are different types of scores that certain lenders look at-such as auto lenders look at one set of scores, mortgage lenders look at one set of scores and so forth. I have a secure job, been there almost 20 years.
    How do we start to build our credit back up, and when?
    How do we know which information is true if our lawyer can't even give us a straight answer?
    If anyone can point me in the direction to start the ball rolling the right way, I'd greatly appreciate it. Thanks!

  • #2
    It's really odd that your credit scores are in the 500s and one at zero. That means that you just don't have any new tradelines (or any at all for the zero). A secured card is what most people get late in the Chapter 13. I don't know why you are hesitant to get a secured card. Your credit is all about length of history and on-time payments. Unless and until you start showing that you can pay on time, then your score will probably just stay stagnant.

    As for straight answers, no one knows exactly how credit scoring works. We do know that payment history (on time) is over 35% of the score and that actually having credit reporting (amounts) can be 30% of the score. Without anything reporting, you'll have a score of 0 (or a very low score from 300-500).

    Each person's score is uniquely generated and includes all the information available to the scoring engine. This is why it is difficult to predict, but the basics are always having things reporting; mix of credit; $$$ of credit in use; on time payments; length of history.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog


    I am not an attorney. Any advice provided is not legal advice.

    Comment


    • #3
      I thought the zero was odd too. We've made the few payments we have (mortgage & lease payments-along with trustee payments), on time for the entire length of the bankruptcy. The dealership said I'd have a slim to none chance of getting any lenders to help even though the other 2 scores would've been ok. As far as getting the secured card, our lawyer told us we'd have to either wait til we're discharged or send a request to the trustee to see if he'll allow us the card. Forgot who mentioned to us that any payment history-even a good one during the bankruptcy-would count for nothing until we're discharged. Kind of like "why should you be rewarded for on time payments if you're in bankruptcy". Seems as though we get conflicting answers, and we don't want to screw up now since we're so close to the discharge. Ive checked my report and there's nothing listed as negative anymore (except the bankruptcy, of course) and all payments are showing as on time.

      Comment


      • #4
        Originally posted by NextPhaseNow View Post
        Forgot who mentioned to us that any payment history-even a good one during the bankruptcy-would count for nothing until we're discharged.
        This is positively not true. The credit score doesn't care except for what you have (credit/amounts), whether you paid on time (history), and when the last time you messed up on payments (aging). Whoever said that was just completely wrong.

        I would seek Trustee approval. I don't think you'll have any trouble being granted approval for a secured card. They may ask for a reason to have a secured card, and you could possibly say that it's for emergencies where you need to rent a car (or other things that require a credit card).

        If you have a trusted family member or very close friend that can add you as an authorized user only, this can help too. Your score is all about those three major factors that I listed.

        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog


        I am not an attorney. Any advice provided is not legal advice.

        Comment


        • #5
          Originally posted by NextPhaseNow View Post
          I am new to this site and am so glad I stumbled upon it. My husband and I filed back in 2014 and our last payment is later this year. I have questions since the lawyer we used doesn't seem to have too many answers.
          We have been making timely mortgage payments and just turned in our leased vehicle (also timely payments). I want to start building credit but not sure which is the best way. We've been told a secured credit card but not until after discharge, since any payments made during the bankruptcy "don't count" towards increasing our credit score. Tried to lease/finance a new vehicle 4 months ago, but the dealership ran my credit and told me that I have a zero as one score, and the others are in the high 500s. They also told me that there are different types of scores that certain lenders look at-such as auto lenders look at one set of scores, mortgage lenders look at one set of scores and so forth. I have a secure job, been there almost 20 years.
          How do we start to build our credit back up, and when?
          How do we know which information is true if our lawyer can't even give us a straight answer?
          If anyone can point me in the direction to start the ball rolling the right way, I'd greatly appreciate it. Thanks!
          I was DISCHARGED 2 June 2017. I was approved for a VA Home Loan from NewDay USA in the amount of $264,900. Every lender that I spoke too stated the same thing; You CANNOT GET A HOME MORTGAGE until 2 YEARS from your discharge date......... VA and USDA have pretty much the same guidelines and allow more flexibility when a debtor has been making SUCCESSFUL PAYMENTS INTO THE CHAPTER 13 PLAN for a MINIMUM of 1 YEAR!

          You first MUST GET PERMISSION from your TRUSTEE and from your ATTORNEY along with an UPDATED MONTHLY BUDGET. You MUST GET PERMISSION from your TRUSTEE if you want to try to REFI with HARP or GET a NEW MORTGAGE! The same is true for wanting to purchase a replacement vehicle. I also purchased a vehicle while in my plan and showed that my anticipated payment would not cause payment issues with the plan. But you have to have a letter from the trustee before you can legally sign your loan.

          In Tennessee, a debtor is required to take the Debt Management Class and a Financial Readiness Class. During these two presentations, a Judge talks to you about what can cause you to be INVOLUNTARILY DISMISSED and POSSIBLY face CRIMINAL CHARGES for VIOLATING THE TERMS OF THE PLAN.

          You will need to shop around for the best option that suits you, but before you do, make sure you have that letter. Then tell the lender your situation, as you move along in the lending process you may be asked to write a letter of explanation on why you filed and how you plan not to get back into financial distress.

          Now about your Credit Score, I am in the same boat. Until you receive a discharge, it will take about 30 to 90 days for your Credit Report to reflect the updated payment information. When you apply for credit ALL OF YOUR OLD PAYMENT, CHARGE OFFS, DELINQUINCIES WILL KEEP YOUR CREDIT SCORE LOW. 30-90 days after the discharge this will be removed. The mortgage companies are NOT REQUIRED to report to ALL 3 Agencies. But they have to report to one annually. When you get close to your final payments, the trustee will request what is called a FINAL CURE NOTICE. This tells the Mortgage Companies to review their balances and any ARREARAGE (Money that you did not pay and owed before the CH13). They will then send a notice to the Trustee stating that all of the payments were made on time and are now complete; or they may state that payments were made late or missed because you failed to fully fund your plan accordingly. This will open up a whole new can of worms that you may need to address before you receive your discharge. The Final Cure Notice can be used as proof to the Mortgage Lender that you made your payments on time to the Trustee.

          If you had a Second Mortgage, go to your County Title and Deed Office and see if there is a Judgment on your title. This WILL ALSO PUT THE BRAKES on your purchase! I know because I almost did not get approved even after the 2nd mortgage lien was lifted but the judgment and 2nd mortgage was still on file from CitiFinancial.

          Finally, go to creditkarma.com and review your reports and dispute the information that may be incorrect. Be patient! This website is great and the ADMINS have nothing but great advice to help you be informed.

          Best of Luck!

          Retired Army DUDE!

          Comment


          • #6
            Thanks to both of you for your input. We are just so disheveled with all of this, because what we've read (including here) is completely different than what our attorney advised us of. Sometimes it's as if he's winging it.
            justbroke My husband and I figured out who told us about not being able to build credit until after discharge. It was the manager of the dealership where I was trying to buy a vehicle. He almost gloated about it! Still can't imagine why he would say something like that.
            RetiredArmy I've definitely been checking on my credit report since we filed, just to see what it's been doing. I've also checked my score, many times (besides the running of it at the dealership). It seemed to be going up (forgot which one) and then one day-it dropped 100 points. Just like that-POOF! And the weird thing was that all my negative accounts (that had been in the bankruptcy) are now all reported as "good". So what gives? We have less than 6 months to go. I feel like taking steps, but so afraid that we'll violate something and be worse off than we were before.

            Comment


            • #7
              To get accurate answers about your scores you need to have your credit pulled by someone with access to a tool like CREDITEXPERT this allows for a modeling by line item within each credit repository.This is for your FICO scores generated by each repository.

              Comment

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