Chapter 13 vs. Chapter 7

[bkdone]

I just wanted to ask: Is it easier to rebuild credit following Ch 7 or Ch 13.

I did Ch.13 and following a long payment plan and I feel good for paying off my debts, so to speak. But to me it feels that reestablishing credit and increasing my scores has been a slow fight. I see lots of Ch.7 folks getting so much credit and new cars pretty fast, and I was just wondering.

I know that the BK comes off my credit in 7 years verses 10 with a Chapter 7, but it seem that is the only benefit.

Anyone care to comment?

[lrprn]

We haven't been discharged yet, so I can't speak from personal experience. However, knowing what other 13ers have posted after discharge, it seems a lot depends on what kind of credit scores you had before filing, the length of your good credit history, and how diligent you've been about paying everything on time after filing.

13ers with many years (decades) of good credit history and multiple paid off loans up until filing seem to have an easier time of things afterward discharge overall.

Personally my impression is that a quick start on getttng credit after filing is not so much the difference filing between 13 and 7 - it's actually a long history of good credit around the bankruptcy. Do you have that?

[bkdone]

Yes, we have appoximately 15 years or so of good credit considering we are relatively young...late 30's and early 40s. We never had any issues with getting a house or cars...had good credit.

Currently our reports are showing our old accounts, new accounts, updated (discharged) accounts, and our mortgage.

I guess I was under the assumption that Ch.13 was better and less damaging than filing Ch. 7. It doesnt seem to really matter...

[Flamingo]

We had it explained to us by several mortgage brokers and finance folks that creditors favor those that file Chapter 13 over Chapter 7 because those in Chapter 13 may pay back all or a percentage of their debt whereby Chapter 7 eliminates it (true conversations). They also favor those that prior to filing had excellent credit histories and also carried themselves well during the Chapter 13 plan payment period and after discharge. While BK is really not a good thing to have on your credit reports, they do look for certain other criteria as to credit after a filing. Also, as in our case and I see as to others that have posted on here also, if you have a prior on time paid off loan with GMAC, Ford Credit or someplace similar, if you are looking for a vehicle and go through a dealership associated with that brand vehicle again, you have a very good chance of gettting approved by the same creditor due to that previously ontime paid in full loan.

The worst is for a long history of bad credit, then filing, and then continued bad habits after the filing. If there is approval for anything, rates will be very high for those people if they can get credit at all.

There are many places (Chase, Citibank, etc.) that will not ever approve you again for anything with them or associated with them if you include them in your filing either Chapter 13 or Chapter 7. That extends even beyond the time it is listed on your credit reports.

I would not let the possibily of obtaining future credit get in the way if one needs to file bankruptcy to get out of trouble. It's best to focus on now and do what one has to do and then take the time to repair your credit in the coming years.

[PaKettle]

[edit]
There are many places (Chase, Citibank, etc.) that will not ever approve you again for anything with them or associated with them if you include them in your filing either Chapter 13 or Chapter 7. That extends even beyond the time it is listed on your credit reports.

I will be happy if I NEVER again deal with Chase, Citibank, BofA, Wlls Fargo, or any of these other big lenders who screwed us big time as soon as I missed a payment by ONE DAY, even after years of on time payments to them.

EFF THEM!!!

Just sayin'....