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Which Impacts Post-BK13 Financial Recovery More : Secured Or Unsecured Debt?

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    Question Which Impacts Post-BK13 Financial Recovery More : Secured Or Unsecured Debt?

    Does it even matter in regaining 100% financial freedom which kind of debt forced you into BK13 in the first place?
    In our case , we did have some home related purchases that would have been classified as secured debt (toilets, refrigerators) but none of these creditors filed in time, so we ended up only with unsecured CCs.
    Does it affect the ability to bounce back from life's greatest setback if you paid back but not all off nothing but unsecured CC debt? Are you rebucketed differently?
    Last edited by Barbisi; 04-05-2021, 03:55 PM.

    #2
    Unsecured debt is the most damaging to even those non-bankruptcy people. More specifically, the number of revolving accounts with balances and the utilization rate(s) on those accounts is what will matter regardless of bankruptcy.

    A mix of different credit being reported, and for a long period of time, yields the best scores. Some revolving debt (less than 9% utilization), some installment debt (a car and/or an installment loan), and a mortgage reported gives the scores the best chance. What destroys the score is missed payments, high utilization (it starts being more visible over 29%), any single card that his 88.5% and above (can drop score 40 points!), too many accounts with balances, very recent credit inquiries, and a lot of new accounts will lower the score and likely keep most people in the 600s.

    At least, that's what I have learned.
    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
      Well jb, as you could see from my many, many posts, having a mortgage on the wrong house simply ruined us financially! (maybe that's why every debtor eyeing BK13 discharge wants a new mortgage - because it will improve their post- BK13 credit score!) But I think you'll forgive me for wanting out of this second CO mortgage and not wanting another (at least not here!) after how these houses and CO and company burned us almost to death LOL!
      I understand that buying a house is normally life's greatest joy but our experience with these two houses and the resulting and ongoing BK13 has left me with the bitterest taste ever in my mouth -there's so much more to living than buying the worst house on the block and by solely fixing it up to code and modern standards, dooming yourself to a wretched five year sentence that couldn't have otherwise happened!
      A word to the wise - only buy a house already fixed up and with cash for a down payment-no BK13 loan!

      Comment


        #4
        Owning a home (having a mortgage installment loan on your credit report) is not necessary for an excellent credit score. A person could still be in the 800s without a reported mortgage, but it's just a component of the FICO scoring model.

        I told you that I almost moved to Greater Denver area because my employer preferred that I move. I wouldn't have moved for a lot more money. The foothills are expensive and I won't even mention the resort area.

        justbroke's musings on home ownership:

        Unless things go perfectly over the 15-30 years of a mortgage, buying a home will be full of surprises. Life happens. Things break. The luster of that new home wears off. You start to hate your home. You spruce it up with new kitchen, additions, maybe even a pool. Fresh paint and carpeting seems to help, for a moment. Maybe it wasn't your forever home. Maybe it's not even your forever town/city/county/state or even country. We dress it up to at least make it livable with dreams of living elsewhere. My forever home would be in the Florida Keys or the Bahamian Cays. I want the salt life... not fishing, just boating. I chose the wrong path and my path was blocked with a bankruptcy. I will survive.


        I write that paragraph not directed at anyone, it's just the many stages of home ownership which I have experienced.
        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
          Jb, I caught a mistake - I meant 401k loan! LOL
          I recall those very words spoken by the realtor who advised us to sue every one involved in the sale of that lemon that ruined my life - "Maybe this will have to be your forever home" when we retorted that we didn't have the cash to fix up the shack and make it sellable! So in desperation we fixed everything with CCs so that nothing would remain others might find objectionable in a sale, not knowing that we could never recoup the 100k we vainly invested! We were so rooked and every day , month and year that I have to continue living here in this state reminds me what an awful mistake moving here was .
          At least you love where you live -you sensed that CO wasn't the right place for you and you shrewdly avoided it!
          I only wish I had known that the outdoors and mountains were not suited to me and in less than seven years I would grow to hate it even as the BK13 controlled my life in a near-stranglehold!
          Ten more payments instead of nine (another error!) -is there any thing ahead after this bankruptcy or just more clapping for Colorado?
          Last edited by Barbisi; 04-05-2021, 08:57 PM.

          Comment


            #6
            Sorry all for the previous post -there is always something related to this most repellent situation happening to us nearly every day. Tomorrow I will post the latest unpleasantries. So fed up!

            Comment

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