Have you checked your FICO scores lately?

[MajorMike]

Yes, I have Orchard ($700), Merrickbank ($1600), Capital One, ($500) and a Discover card ($1100).

So you can use any broker to apply for a FHA loan?

How did you get credit in a 13? I thought you couldn't have it???

[chpxiii]

How did you get credit in a 13? I thought you couldn't have it???

You're not supposed. The only time you can take on new debt while in active Chpt. 13 is to buy a house and/or a car. But it has to be court approved.

I don't know how any one can have a credit card while in an active chapter 13. That can get your case dismissed because it is not allowed.

[BKOnce]

I disputed, and they recently send me letter changed the word IIB on some cards, 0 balance. But does anyone know when my score will change? Score change immediately or later? Thanks.

[2ndChanceTx]

I disputed, and they recently send me letter changed the word IIB on some cards, 0 balance. But does anyone know when my score will change? Score change immediately or later? Thanks.

I think that the biggest increase that you get from IIB is the fact that the balance goes to zero, once the record has changed (ie you got the letter saying they changed it) you could go to Myfico.com and get your score again and it will have the updated info and if your score has chaged as a result. It can be very encouraging to write letters get things changed and see your score go up as a result. I have gone from the high 580-590 range to the Mid-High 600's in the period from June 07-Dec 07.

2ndChanceTX

[southerncomfort]

How did you get credit in a 13? I thought you couldn't have it???

Well, the capital one card I had prior to the bankruptcy and they sent me a new one in the mail when the old one expired. I was shocked as my other cards had been cancelled (even ones with zero balances that had always been paid on time.) The others I applied for (while in 13) in order to start re-establishing credit. I was rather shocked that I was approved.

I consider this to be a situation of "flying under the radar". I seriously doubt that the trustee is running credit checks on all the debtors in his/her district to see if they have some measly little credit card accounts. So, I feel like as long I pay those cards according to the agreement, it is unlikely to bother the trustee. My expereince w/ my trustee has been that if you make the payments and send in tax refunds, they leave you alone. Of course, I don't recommend that anyone follow my example. This is only my choice . .

[southerncomfort]

You're not supposed. The only time you can take on new debt while in active Chpt. 13 is to buy a house and/or a car. But it has to be court approved.

I don't know how any one can have a credit card while in an active chapter 13. That can get your case dismissed because it is not allowed.

Yes, but just as you posted in the other thread, so can not reporting substantial pay increases. Yet, neither are likely (if you are a betting person) to cause your case to be dismissed, IMO, as long as you make the payments.

[MajorMike]

You're luck you get away with this Southern...because once they close your account, they will report that on your credit report and if your trustee ever wants to see it, they could easily dismiss your case! You're playing with fire, IMO
Those credit lines are NOT little. You have a few over a grand and close to $2K. That's crazy!

[MajorMike]

Mine are 687/665/661. That is with most everything reporting 0/0 and IIB or Included in Chapter13/ Wage Earner Plan. It took about six months to get most of the stuff correct and there are a couple of stubborn accounts that report balances and past due amounts.(on one CRA) I am going to wait until the discharge to get agressive with them to report correctly. My goal was to start cleaning up early so that when I get out of 13 (about 8-10 months) I will be able to start looking for a house....

2nd Chance TX

wow, your scores are high! good for you!

[Skorpnix]

You're not supposed. The only time you can take on new debt while in active Chpt. 13 is to buy a house and/or a car. But it has to be court approved.

I don't know how any one can have a credit card while in an active chapter 13. That can get your case dismissed because it is not allowed.

In my paperwork it states I may not incur more than 500 in DEBT other than emergencies. It didnt say anything about CREDIT. I asked my lawyer to verify that he stated some people even have cc make it through the bk filing and that is the cc option so you wouldnt be penalized for that. I didnt have any that survived. What was funny is HSBC offered me a unsecured card just 5 months after the filing and stated it was pre-approved. For laughs I sent it in because I had a plan and they approved it and gave me a 300 cl. Now before anyone kills me on this I have my reasons. 1) if you go places you even though you intend to pay with cash you need to secure it with a cc and they dont always take debit cards. 2) I found this to be a way to re-build credit earlier than I thought I could. I go to Taco Bell, Del Taco, etc once a month and use it then pay it off the next month. So now I have history. I would have spent cash anyways to eat. From people I have talked to is just stay under the radar if you do this and for GOD's sake make sure you make your monthly payment to the Trustee and you dont have to worry about cc. Any thoughts or comments???

[southerncomfort]

You're luck you get away with this Southern...because once they close your account, they will report that on your credit report and if your trustee ever wants to see it, they could easily dismiss your case! You're playing with fire, IMO
Those credit lines are NOT little. You have a few over a grand and close to $2K. That's crazy!

Considering that they opened the credit card accounts during my 13, I see no reason why they would close them assuming I play by their rules.

Also, those credit lines are little to me--my BR payment is over $3,000 a month. The trustee makes a ton of money off of me. The trustee would have to be stupid to dismiss my case. The fees I generate for his office are comparable to 20 other debtors combined (I know becuase at the 341 meeting they announced everyone's plan payments and believe me, we won by a landslide).

At the conclusion of my BR I will have paid over $100,000 back. I can't see the equity in the court saying, "hmm, you have $3,000 in credit available, case dismissed!" Of course, I don't think it will ever come to that--I really do not think that the trustee's office is monitoring people's credit reports. Again, just my IMO. I will let you all know in 9 months how it ends!

Oh and one other thing--I spent some time studying dismissed cases on PACER (in my district/under my trustee). Hundreds of cases and every single one was for failure to make plan payments. I never saw ANY other reason for dismissal.

[MajorMike]

Bottom line is you are not supposed to incur ANY debt without the trustee's consent. That alone could piss him off and cause your case to be dismissed. The trustee's salary is capped. Just because you're paying that much, doesn't mean he gets anymore because of you. He works for the creditors, not you. If you can afford to pay back even the minimums on these new cards, and they ( the creditors / trustee ) find out, you risk dismissal and trust me, you don't want that when the automatic stay is lifted and you have to start all over. Are you in 100 percent payback?

[bankruptcy?]

SouthernComfort,

With some lenders there is no minimum credit score required for FHA loans. Most are around a 580 mid, but tell your broker to go to Flagstar, where they have no minimum and they can also manually underwrite your loan. The biggest factors are length from filing date of your BK, which needs to be 24 months, unless you have extenuating circumstances that caused you to file BK to start with. Also your housing ratio cannot exceed 31% if you have your loan manually underwritten. Which means if you have 3000 in income per month your house payment cannot exceed $930.00. Email me at [email protected] if you have any other questions.

[southerncomfort]

Bottom line is you are not supposed to incur ANY debt without the trustee's consent. That alone could piss him off and cause your case to be dismissed. The trustee's salary is capped. Just because you're paying that much, doesn't mean he gets anymore because of you. He works for the creditors, not you. If you can afford to pay back even the minimums on these new cards, and they ( the creditors / trustee ) find out, you risk dismissal and trust me, you don't want that when the automatic stay is lifted and you have to start all over. Are you in 100 percent payback?

Obtaining Credit During Chapter 13
Cathleen Cooper Moran

Q.
My husband and I filed Chapter 13 almost 4 years ago. We still have a year left to go on the plan. Is it legal for us to obtain credit while on the plan?

-- Anonymous

A.

Chapter 13 trustees, who are the overseers of Chapter 13 plans, are cautious about debtors incurring more debt while they are engaged in paying off old debt. New borrowing may be a sign that the debtor's budget isn't really feasible. The Code provides that new debt incurred without the trustee's consent is not discharged should the case convert to Chapter 7.

On the other hand, Chapter 13 debtors borrow money to replace vehicles routinely. So, the nature of the borrowing is important to the trustee.

If your question is really, can I get a credit card to start rebuilding a credit record, there is no law against it, so long as your application to get the card is truthful and you are able to pay off the balance every month. Check the order confirming your plan and any local rules or trustee handbook you may have received at the beginning of your plan for any rules on new credit. Your attorney can help you with this issue.

-- Cathleen Cooper Moran

[cso5@]

Interesting

I too had thought about getting a secured card that reports to the credit bureaus, to start the long process of rebuilding -- doing pretty much the same thing -- charging something I'd buy anyway, and pay it off. Small amounts.

But I had been scared of the ramifications of the trustee finding out -- the dilemma of flying under the radar vs. cleaning up my credit report and preparing for a life after bankruptcy. Not a life that includes a million credit cards -- but a better mortgage, a better car and reasonable interest rate, etc.

I think I will look more closely into this and maybe think about getting a secured card. I'll check out the rebuilding credit forum here.

[jgarton244]

We actually refinanced our mortgage while in the third year of our BK 13 plan. In order to get an FHA mortgage, we needed FICO of 580 or better, which we had. We also had to prove we did not miss any payments, or were late in our BK 13 plan. We were able to get a 6.75% interest rate. Bank of America was who we got the mortgage with, and they were even one of our creditors we were paying in our plan for CC debt.