Credit Card surviving Bankruptcy?

[iswmle]

Those crazy kids at WFNNB just gave me a credit line increase. My Victoria Secret card went from $830 to $1030. It is so odd, because shortly after my BK they increased it twice. I thought that would be the last time I saw a cli and next time they would see the BK on my public record and shut me down. The fact that I almost never use the card probably does not work in my favor, either.

Or maybe it does since they just increased the credit line. =/ So so far not only is this VS card my oldest account, it is my highest as well, beating out my CU card by $30, haha.

[SkilledOne]

The more I look into this, the more I don't like what I'm seeing and hearing. And you may be right, IBroke. But I'll keep fighting until there is a "legal" resolution. So here's some update. First the bad news...

I finally called and spoke with my mortgage company, and they FLATLY REFUSE to report my mortgage payments, saying that since I filed BK (even if I did not intend to include the mortgage, they consider it still included), they have a right not to report it. UNLESS I RE-AFFIRM, they say. But from reading comments from this blog and elsewhere, re-affirming doesn't help one's credit scores much, the BK remains (including the mortgage), and I only end up entangling myself should life throw me another bad loop.

Now the good news...

1. My attorney has written the MORTGAGE COMPANY (not the credit bureaus) a "mild" letter requesting that they report my payments. Salient portions:

"Mr. X (me) requests that you report his active mortgage to the three credit reporting agencies. This shall be considered Mr. X's formal and final request. If Mr. X's request is not met within 30 days of the date of this correspondence (4/11/2011), then Mr. X has indicated that he will seek additional legal assistance with this matter."

I am eager to read their formal response to this letter, even if they state what they told me over the phone. I WANT TO SEE IT IN (LEGAL) WRITING!

2. Since I still have about 20years on the mortgage, I'm thinking of re-financing by July 2012 (when the initial 7-year BK penalty falls off my credit report). Meantime, I'd be paying down my (new, post-BK) debt heavily to improve my credit-score even more.

So I wait to see what happens within the next month, and will keep y'all posted.

[IBroke]

Well, that was fast, IBroke!

Clearly, you are VERY into this - my gain, and GREAT!

I hear you about the SECURED nature of the property and the LIEN. I can tell you, though, that my mortgage statements always include the following statement, verbatim: "WE MAY CONTACT YOU IF PAYMENT IS NOT RECEIVED BY SCHEDULED DUE DATE." And, true to their word, when I missed my payments those two times in 01/2008 and 05/2009, they did pursue me by phone! Per your explanation, they may have violated the "permanent injunction" code, then, right?

If it's true what you posted in the next part, the permanent injunction does not apply because the mortgage was not part of your BK:

Thinking of it, I recall that when we first filed, the lawyer specifically told me that my mortgage was EXEMPT and was not included in the debt-listing when we filed. I could almost swear on this point. Is that the reason why the mortgage company was able to "actively" pursue me once I missed my payment those two months? Is it possible that the rule changes that came into effect in OCTOBER 2005 is what requires all debt, including an active and current (on payments) mortgage, be included in a bankruptcy filing? I really should speak with an experienced lawyer about this.

That is a good question. I just "entered" the field of BK about 2 years ago so I have basically no clue about the regulations prior to the law-change. IF the mortgage was NOT part of your petition and it was possible prior to October 2005 to exclude your mortgage in a CH7, THEN we are dealing with something else:

If the mortgage was indeed NOT part of the petition, the credit-bureaus are indeed reporting incorrectly. If the mortgage was NOT IIB, they mustn't report it as IIB. They should also report every payment you made.

On the downside, the lender can still actively collect because your personal liability is still there.

I have to admit that I never met anybody on this board who filed prior to the law-change so I assumed the mortgage was discharged as well. My bad.

One quick question: once my 7-year penalty expires in 4/2012 and all the negative accts are removed from my report (except the fact of the bk, itself) how is my relationship to my mortgage company affected? Especially since I did not re-affirm? I guess the lien is the only trump card they wield still?

The credit-reporting has no effect on your mortgage-contract. Now, since you just told me that the mortgage was NOT discharged, the debt is still there as well - not just the lien. Since you are in a non-recourse-State, that is not such a big problem as it would be in my State.

You couldn't reaffirm because your mortgage was not part of the BK. The original contract is still effective, so no reaffirmation came into play.

I may call the mortgage company with your suggestion about reporting my payments (I am happy to assure them there'd be no lawsuit) once I've had a chance to talk with an experienced lawyer. I still plan to send the lawyer the addresses to fire out the letter to EXPERIAN and TRANSUNION. Maybe once an experienced bk lawyer examines my case, they'd call me to set my mind at ease.

I will definitely continue to share my experiences on this matter.

The first thing you have to be 100% sure of is of the mortgage was indeed exempt of your BK or not. That is the question that decides the credit-reporting question. If you aren't 100% sure, have a lawyer figure it out for you.

If it was exempt, your payments should be reported and NO IIB-notation should be on the account.

Keep us up to date!

[SkilledOne]

Well, that was fast, IBroke!

Clearly, you are VERY into this - my gain, and GREAT!

I hear you about the SECURED nature of the property and the LIEN. I can tell you, though, that my mortgage statements always include the following statement, verbatim: "WE MAY CONTACT YOU IF PAYMENT IS NOT RECEIVED BY SCHEDULED DUE DATE." And, true to their word, when I missed my payments those two times in 01/2008 and 05/2009, they did pursue me by phone! Per your explanation, they may have violated the "permanent injunction" code, then, right?

Thinking of it, I recall that when we first filed, the lawyer specifically told me that my mortgage was EXEMPT and was not included in the debt-listing when we filed. I could almost swear on this point. Is that the reason why the mortgage company was able to "actively" pursue me once I missed my payment those two months? Is it possible that the rule changes that came into effect in OCTOBER 2005 is what requires all debt, including an active and current (on payments) mortgage, be included in a bankruptcy filing? I really should speak with an experienced lawyer about this.

One quick question: once my 7-year penalty expires in 4/2012 and all the negative accts are removed from my report (except the fact of the bk, itself) how is my relationship to my mortgage company affected? Especially since I did not re-affirm? I guess the lien is the only trump card they wield still?

I may call the mortgage company with your suggestion about reporting my payments (I am happy to assure them there'd be no lawsuit) once I've had a chance to talk with an experienced lawyer. I still plan to send the lawyer the addresses to fire out the letter to EXPERIAN and TRANSUNION. Maybe once an experienced bk lawyer examines my case, they'd call me to set my mind at ease.

I will definitely continue to share my experiences on this matter.

[SkilledOne]

Well, that was fast, IBroke!

Clearly, you are VERY into this - my gain, and GREAT!

I hear you about the SECURED nature of the property and the LIEN. I can tell you, though, that my mortgage statements always include the following statement, verbatim: "WE MAY CONTACT YOU IF PAYMENT IS NOT RECEIVED BY SCHEDULED DUE DATE." And, true to their word, when I missed my payments those two times in 01/2008 and 05/2009, they did pursue me by phone! Per your explanation, they may have violated the "permanent injunction" code, then, right?

Thinking of it, I recall that when we first filed, the lawyer specifically told me that my mortgage was EXEMPT and was not included in the debt-listing when we filed. I could almost swear on this point. Is that the reason why the mortgage company was able to "actively" pursue me once I missed my payment those two months? Is it possible that the rule changes that came into effect in OCTOBER 2005 is what requires all debt, including an active and current (on payments) mortgage, be included in a bankruptcy filing? I really should speak with an experienced lawyer about this.

One quick question: once my 7-year penalty expires in 4/2012 and all the negative accts are removed from my report (except the fact of the bk, itself) how is my relationship to my mortgage company affected? Especially since I did not re-affirm? I guess the lien is the only trump card they wield still?

I may call the mortgage company with your suggestion about reporting my payments (I am happy to assure them there'd be no lawsuit) once I've had a chance to talk with an experienced lawyer. I still plan to send the lawyer the addresses to fire out the letter to EXPERIAN and TRANSUNION. Maybe once an experienced bk lawyer examines my case, they'd call me to set my mind at ease.

[IBroke]

NEW INFORMATION

I just spoke with a Prepaid Legal representative attorney and she proposes to write a letter to the 2 credit bureaus on my behalf to correctly report my mortgage payments. She sounded quite inexperienced, I'm afraid, and I didn't feel encouraged to ask deeper, probing questions. She needs the mailing addresses where to mail the letter (I'm about to contact Experian and Transunion for the correct address). This is a first step that is not costing me a dime (besides my regular $25/month PREPAID LEGAL membership) and, why not, I'll take the chance!

I almost concluded a call to my mortgage company, but I hung up while on hold for a "representative." I'd rather not talk to them yet, I don't want to commit myself or say something wrong. "This is an attempt to collect a debt, and any information obtained would be used for that purpose. If you filed bankruptcy and your mortgage was not re-affirmed, please disregard this message," sounded cautionary enough for me to hung up immediately! LOL!

The paralegal is simply wrong (see what I wrote before).

Again, simply write your lender a mail and ask them if they could report your payments in the future and that you would not consider that reporting to be a violation of the permanent injunction under the BK-code (meaning that you would not consider it to be an attempt to collect).

[IBroke]

Thanks for your response, IBroke. Appreciate it.

I read somewhere that "re-affirming" (esp. as a means to improve credit score - which is my primary goal right now - is not such a great idea). My BK also closed before the "reaffirming" requirement/need came into effect in October 2005. I'd rather not entangle myself unnecessarily, wouldn't you say.

What I find curious is why the lender is willing to accept the payments (the law acknowledges this) but refuses to report them (to avoid supposed "legal" consequences). They shouldn't have it both ways. Hurt your credit with the negative bankruptcy reporting, while taking your mortgage payments every month. Double jeopardy, and reverse double-dipping of the worst kind. My thinking is that IF they aren't allowed to "legally" take your mortgage payment, then they shouldn't report the mortgage account as CH7 on your credit report at all. Fair is fair.

I have "disputed" the item again online, and they say they'll re-contact the lender. Is there a difference between asking them to "re-report" vs. "disputing?" I think it's time I called my lawyer, but thanks for your insights and I would post any pertinent info that I gather from my Prepaid Legal attorney. Thanks again!

You mustn't forget that your mortgage is a SECURED loan with a LIEN. That's why they ARE allowed to take your payment. BTW, any creditor after BK is "allowed" to TAKE your payment - they are just not allowed to actively collect it - by sending you reminders or call you and say there is something "due". Many statements on mortgages after BK-discharge are going to say "for information only - not an attempt to collect". Your discharge and lack of reaffirmation is the reason for that. You are keeping your house in return for the monthly payments. Your personal liability was discharged in the BK but the lien is still there. That's what your payments are for. The personal liability for the DEBT of the mortgage is discharged - the lien is still there. Credit reports are all about DEBT and payments towards that - they are not about liens.

North Carolina is a non-recourse state but here in Florida, a lender could sue you for any deficiency after you walked away from your home. A non-reaffirmed mortgage would protect you from that.

I don't think there is a difference between "re-report" vs. "disputing". As I said, a dispute over the bureaus won't help you much. If it was not reaffirmed (which was a VERY wise decision), the correct reporting is "IIB" and $0 Balance. If you want them to report your payments, you need to contact your lender and ask them if they could.

[SkilledOne]

NEW INFORMATION

I just spoke with a Prepaid Legal representative attorney and she proposes to write a letter to the 2 credit bureaus on my behalf to correctly report my mortgage payments. She sounded quite inexperienced, I'm afraid, and I didn't feel encouraged to ask deeper, probing questions. She needs the mailing addresses where to mail the letter (I'm about to contact Experian and Transunion for the correct address). This is a first step that is not costing me a dime (besides my regular $25/month PREPAID LEGAL membership) and, why not, I'll take the chance!

I almost concluded a call to my mortgage company, but I hung up while on hold for a "representative." I'd rather not talk to them yet, I don't want to commit myself or say something wrong. "This is an attempt to collect a debt, and any information obtained would be used for that purpose. If you filed bankruptcy and your mortgage was not re-affirmed, please disregard this message," sounded cautionary enough for me to hung up immediately! LOL!

[SkilledOne]

Mortgage reporting on credit report post-CH7 discharge

Thanks for your response, IBroke. Appreciate it.

I read somewhere that "re-affirming" (esp. as a means to improve credit score - which is my primary goal right now - is not such a great idea). My BK also closed before the "reaffirming" requirement/need came into effect in October 2005. I'd rather not entangle myself unnecessarily, wouldn't you say.

What I find curious is why the lender is willing to accept the payments (the law acknowledges this) but refuses to report them (to avoid supposed "legal" consequences). They shouldn't have it both ways. Hurt your credit with the negative bankruptcy reporting, while taking your mortgage payments every month. Double jeopardy, and reverse double-dipping of the worst kind. My thinking is that IF they aren't allowed to "legally" take your mortgage payment, then they shouldn't report the mortgage account as CH7 on your credit report at all. Fair is fair.

I have "disputed" the item again online, and they say they'll re-contact the lender. Is there a difference between asking them to "re-report" vs. "disputing?" I think it's time I called my lawyer, but thanks for your insights and I would post any pertinent info that I gather from my Prepaid Legal attorney. Thanks again!

[SkilledOne]

Thanks for your response, IBroke. Appreciate it.

I read somewhere that "re-affirming" (esp. as a means to improve credit score - which is my primary goal right now - is not such a great idea). My BK also closed before the "reaffirming" requirement/need came into effect in October 2005. I'd rather not entangle myself unnecessarily, wouldn't you say.

What I find curious is why the lender is willing to accept the payments (the law acknowledges this) but refuses to report them (to avoid supposed "legal" consequences). They shouldn't have it both ways. Hurt your credit with the negative bankruptcy reporting, while taking your mortgage payments every month. Double jeopardy, and reverse double-dipping of the worst kind. My thinking is that IF they aren't allowed to "legally" take your mortgage payment, then they shouldn't report the mortgage account as CH7 on your credit report at all. Fair is fair.

I have "disputed" the item again online, and they say they'll re-contact the lender. Is there a difference between asking them to "re-report" vs. "disputing?" I think it's time I called my lawyer, but thanks for your insights and I would post any pertinent info that I gather from my Prepaid Legal attorney. Thanks again!

[IBroke]

SkilledOne,

When you filed for BK and were discharged, did you reaffirm your mortgage? If not, EQUIFAX and TRANSUNION are actually the ones reporting "wrong". Once a debt is discharged (yes, a mortgage IS part of a CH7 BK as well), the creditor is actually not allowed to continue reporting your history with balances because this could be seen as an "attempt to collect" which would be a violation of the permanent injunction after your discharge.

However, you could ask the lender to report again - maybe they will do so.

[SkilledOne]

This is my first post, and it's the question that brought me here in the 1st place. Hope I'm posting it in the correct thread.

I live in NC. I filed for Chapter 7 bankruptcy in 04/2005, and was discharged in 07/2005. Only had credit cards/consumer loans, and my mortgage. My understanding was that my mortgage was not technically part of the BK since we still live here, and have been paying steadily before, during and since the BK until today. (Missed 30-days twice on 01/2008 and 05/2009 since the discharge in 07/2005).

Recently, I was perusing my credit report and found the following:

1. EXPERIAN lists it as BK, as "CLOSED," and says nothing whatsoever about payment history! (SCORE: 606)
2. TRANSUNION also lists it as BK, under "Adverse Accounts," but notes "paid or paying as agreed." (SCORE: 630)
3. EQUIFAX is the only one that lists this correctly as an active mortgage, with correct payment history and all. (SCORE: 680)

I disputed the EXPERIAN & TRANSUNION reports at their websites, and they both came back with essentially the same thing: verified correct.

Before I contact my mortgage company and my bk lawyer, can anybody shed some light on this for me? Any similar experiences? What do I say/not say when I call mortgage company or even when I talk to my lawyer?

Thanks for any help!

[BrokeinMD]

Fashion Bug dropped me from $1100 credit to $200.00, that's $100.00 more credit than I had when I first opened it. My fresh start is truly that, with my same first card. Wish I had the years back, too. LOL

[IBroke]

There is no guarantee that any zero balance card will survive a BK filing; 99% of them get closed, if not within several weeks/months, even a few years down the road.

They certainly can be closed after a while - and that's why I already "planted" 3 new accounts right after discharge.

[penniless]

My Macy's made it through, but they cut my limit to 100 lol.