There is hope for everyone . . .

[Kuya]

Kuya- congrats on being at the end. I'm sure that's a great feeling.

I was kind of wondering the same thing though. Six credit cards and a personal loan would be pretty side-eye worthy for my trustee. Just a word of warning to those who are in a Chapter 13....unless you've been told otherwise, you should immediately report income increases to your attorney or trustee. You should also clear all requests for credit with your trustee.

I think it's possible to fly under the radar, but that's pretty risky, especially since a lot of trustees request tax returns and things of that nature on a yearly basis. If you report changes immediately, you'll protect yourself from finding our a year or so later that you could possibly owe more than you think. It's also possible your attorney can work it out so your new higher income is exempt. Heck, it's possible trustee doesn't even care, but what if he does?

As for the six credit cards, a lot of people file bankruptcy because they had out of control spending habits. In the middle of making months of Chapter 13 payments it would be extremely easy to fall back into that trap when things get tight. Sometimes my monthly payment makes me want to go rob a bank afterwards. True story.

This kind of crap is what happens when a finance and budget analyst files bankruptcy. I feel the need to go out into the world and talk about budgets and finance. Sorry. Ignore me. Life is so ironic sometimes. Just sayin'....if you filed bankruptcy for credit card issues, it'd probably be wise not to go out and apply for a handful anytime soon.

papie . . and everyone else. . I agree 100%. I am not saying that my situation is different. It is not. However, I am recently married. It's our dream to buy a house and have a family. We all know that with my bk, buying a house is possible but at a much higher interest rate. That's not fair to do to my wife. Her credit is fine.

I know that I am not doing what is right for everyone. But for me, my life has changed financially a great deal. I am not immune from making more mistakes . . but I DO know that I have to fight to get a normal life back.

6 credit cards is too much . . agreed. But i watch my credit score on credit karma EVERY DAY. I am obsessed with making it better . . You do need several revolving credits and loan terms to increase your credit score . . . BUT . . . again . . my situation fits for me and only me. We are all different.

I never meant to cause so much confusion . . .

Maybe people can read this and see WHAT NOT to do . . . I should maybe re-title this post

[papie]

Kuya- congrats on being at the end. I'm sure that's a great feeling.

I was kind of wondering the same thing though. Six credit cards and a personal loan would be pretty side-eye worthy for my trustee. Just a word of warning to those who are in a Chapter 13....unless you've been told otherwise, you should immediately report income increases to your attorney or trustee. You should also clear all requests for credit with your trustee.

I think it's possible to fly under the radar, but that's pretty risky, especially since a lot of trustees request tax returns and things of that nature on a yearly basis. If you report changes immediately, you'll protect yourself from finding our a year or so later that you could possibly owe more than you think. It's also possible your attorney can work it out so your new higher income is exempt. Heck, it's possible trustee doesn't even care, but what if he does?

As for the six credit cards, a lot of people file bankruptcy because they had out of control spending habits. In the middle of making months of Chapter 13 payments it would be extremely easy to fall back into that trap when things get tight. Sometimes my monthly payment makes me want to go rob a bank afterwards. True story.

This kind of crap is what happens when a finance and budget analyst files bankruptcy. I feel the need to go out into the world and talk about budgets and finance. Sorry. Ignore me. Life is so ironic sometimes. Just sayin'....if you filed bankruptcy for credit card issues, it'd probably be wise not to go out and apply for a handful anytime soon.

[Peeps]

It's nice that you've taken the time to share your experience. It may not be the norm, but then again everyone's situation is different. Glad to see your hard work has given you a successful outcome. This thread will be helpful to people who are just starting (or are in) the process, including some of the comments that show where people might want to be mindful of communications with a trustee.

[Flamingo]

The reason you are able to do what you do is that you have not reported income increases over the course of your Plan and have obvious increased disposable income since your cirumcstances have changed considerably since the day you filed. If your trustee gets wind of your other 5 credit cards or the $5,000 you put into a secured loan, you will have a lot of questions to answer. Your trustee can ask for any financial information from you at any time during your Plan and normally will not speak with someone when the are represented by an attorney. You are getting approved by BK friendly creditors that cater to bad credit/folks in BK due to your plan payment being so low compared to your income and can't include them in a filing nor file BK again for another 7 years or so. Most people right out of BK are able to get low limit cards from most of the creditors you list.

Many people walk out of a Chapter 13 with credit scores in the high 600s or low 700s just because they paid everything on time during those years and were prudent as to credit. We refinanced during year 4 of our Chapter 13 and our credit scores were in the 670s. Getting six credit cards in a chapter 13 just to improve credit is really not a good idea as usually it is credit cards that put one into BK and could now set one back on the same path. In a Chapter 13 one needs to obtain approval for obtaining credit or one risks dismissal of their Chapter 13 and also failing to report raises, bonuses, etc. can result in the same. Keep your fingers crossed your Trustee doesn't find something to raise a red flag at this point in your Plan. If you were smart in the long run, you would have made better attempts to contact and work with your attorney to ensure there would be no possibility of a plan dismissal.

Something just doesn't add up about this situation or else you are just one really lucky person.

[Kuya]

To clarify:

I have no reason to make up stories. I gain nothing by lurking around BK forums offering false hope. I agree, this is not the norm. I agree that everyone should not hope for all of this. My point was to show there is light at the end of the tunnel.

Trustee required pay stubs annually to verify my income. Although if we put this in perspective . .

A raise of $17,000 did not come all at once . . it was about $3 or $4 per year . . .
Thats about $140 in each bi weekly check .. . BEFORE Taxes . . .

My cost of living over 5 years has increased more than that. My apartment alone is now $300 more each month then before.
I am thankful for my fortunate pay increase - but I have busted my butt to get it. I work very hard and put in very long hours.

Now, to clarify more:

I asked my Trustee . . in general . Will I be allowed to get a CC if I use it for purchases under $100 and pay it off each month, to help put my credit back on track. No, she did not tell me it was ok to get 6, but she did say ok to my general request that we never specified an amount. So, in that aspect - I don't recommend you do what I did .

My attorney rarely answers my emails or returns phone calls, therefore I typically just call my Trustee's Office for questions.


As you can see from my posting . . . in sharing my story . I did not intend to get anyone rallied up . . . or cause commotions . . I just wanted to share that it was not ALL Bad . . and you can make it.


If you feel that my information is incorrect or unwarranted . . then please just delete the posting.

Gosh, it was not meant for ill intentions.

[justbroke]

For Florida cases, this must be atypical! I know that my Standing Chapter 13 Trustee wanted to see tax returns and used that as a basis for increases to the unsecured creditors. While incredulous, this may be the first time that a Chapter 13 debtor was given a lot of latitude in Florida. One usually has to BEG the Trustee for things. I didn't even dare ask my Trustee for a credit card (for business) even though I really needed it.

Of course I was in a 0% plan. Now, if the debtor was in a 100% plan, then this all makes sense to me; but the posting shows that it was a 10% plan. Just odd, that's all.

[steveok]

I agree..seems that if she was at 10% and had all the disposable income the trustee would have increased payments to the unsecured...something is not adding up...

[Flamingo]

It could very well be true that you are not allowed to own a credit card during BK . . . but I think that is incorrect.

You ARE allowed to take on a debt, with the permission of your Trustee. Which, I have always been able to get. I explained to my Trustee Office my desire to build my credit. My Trustee also allowed me to take on an auto loan during BK. It was the bank that finally turned it down, saying come back once I have bk close papers in hand.

I guess it would depend on each individual case and Trustee. Certainly I now make 6 times the amount I made when I filed BK. Financially I am able to prove and justify that I am in a better place then I was previously.

Overall, I have no idea what is needed, just that YES you can get credit during BK if (1) Your Trustee approves it and (2) a Creditor is willing to give you a chance.

I see many people saying that you CAN NOT have debt during BK. But I have NEVER seen anything in writing legally to support that. I have only seen that you must seek the approval of your Trustee prior to . .

Your Trustee allowed you to take on SIX credit cards during an active Chapter 13? And several with high limits? And also two personal loans? Does your attorney know about all this? Also, as soon as the bank for your auto loan saw you had active credit cards on top of paying a Chapter 13, they put their tail between their legs and ran. Does your attorney and trustee know of the increase in your income from to it's present $60,000? That is one heck of a jump.

What you are doing is not the norm nor allowed as to obtaining all that credit/loans and it appears you got permission for maybe the first card but went and got the rest on your own thinking it was OK. You explain a lot of personal stuff but you don't explain contact with your attorney or trustee as to all your loans and credit. What you are posting gives those in Chapter 13 false hope that this will occur to them; if what you are posting is all true, that is wonderful and good for you but it is not the norm when one files Chapter 13.

[df04527]

Congrats Kuya! Good for you to reward yourself. You deserve it. You have to have stamina and tenacity to get through it. It IS worth it on the other side -- and the experience will last a lifetime.

Congrats again!

[enginegirl]

Thank you so very much for sharing! Your story is what I am hoping for....
I am 5 months in to 60 month plan... every extra penny I make whether it is a raise, bonus or tax refund etc is going to be paid into the plan.... I am not bitter or angry about this as I am able to live on the money I have been allowed in my plan and am only scheduled to payback a small % of my debts... In 55 more months I will be debt free, my HELOC(2nd Mortgage) will be gone, and I will own my car outright (it is a late 2010). and in 55 months I will get a nice pay raise, that is whatever my payment amount ends up being.... $550, or $2000.
It has been a hard road to get here and I keep hearing all of the horror stories... so again.. THANK YOU and happy healthy and smooth closing in 2011!!

[Kuya]

It could very well be true that you are not allowed to own a credit card during BK . . . but I think that is incorrect.

You ARE allowed to take on a debt, with the permission of your Trustee. Which, I have always been able to get. I explained to my Trustee Office my desire to build my credit. My Trustee also allowed me to take on an auto loan during BK. It was the bank that finally turned it down, saying come back once I have bk close papers in hand.

I guess it would depend on each individual case and Trustee. Certainly I now make 6 times the amount I made when I filed BK. Financially I am able to prove and justify that I am in a better place then I was previously.

Overall, I have no idea what is needed, just that YES you can get credit during BK if (1) Your Trustee approves it and (2) a Creditor is willing to give you a chance.

I see many people saying that you CAN NOT have debt during BK. But I have NEVER seen anything in writing legally to support that. I have only seen that you must seek the approval of your Trustee prior to . .

[steveok]

I didn't think you could get a credit card during an active BK.....

[Kuya]

I am posting this to share a little bit here, and offer maybe a glimmer of hope to others in the same boat:

MY BK was not a huge amount (but then again, that depends on what you compare it to). I was working full time for min wage, and living from check to check. By the time I got paid every two weeks, I had already been broke for 3 days, hoping I had enough gas to get me through.

I worked full time as a temp, and my employer kept promising me a "career" with a huge promotion. I really felt he was sincere so I toughed it out. Then one day, my car died. Engine repair would cost about $1,200. Without a car, I don't work. But how can I fix my car with no money?

I did the only thing I could think of. I used my rent money to fix my car . . rent went late. Credit cards went late or underpaid, hoping to catch up later. BUT . . one late $40 credit card payment resulted in huge fees, and a new minimum payment that was triple what it had been previously. If I can't pay $40/month, how could I now pay $120 a month? Soon late fees became late AND over the limit fees. I began an ugly spiral downwards. Can't come out of it. Interest rates on Credit cards rose to 24%. Creditors called every day. Some were decent and worked with me. Other creditors were bull dogs.

In about 8 months time, my old CC bills of $3,000 were now a whopping $8,000 due to late fees, over limit fees, and ridiculous APR. My car finally DIED, and I tried my best to get a loan for a cheap car . . but guess what? No bank wants to give me a loan for a cheap car with low payments, because of my bad credit. The banks would only give me a loan for a brand new car, so there would be equity. GREAT . . so here we go.

Finally, it happened. I DID get my big promotion at work and went from making min wage, to 42K year. My first check, I immediately called all of my creditors to try to work out a deal. Most were very happy and willing to work with me. With one exception: Chase Bank.

I owed Chase Bank about $4,000 (mostly fees). I offered them $700 from my first check, with $200/month until it was paid off. That was all I can afford, and still make payments to everyone else. They said NO! They wanted all $4,000 now . . or nothing. If I can't give $4,000.00 immediately, they will garnish my wages.

I knew if they garnish my wages, it would be a 20 year tornado coming. If they garnished my wages, I can't afford to pay my other creditors, which means all of my creditors will simply get in a long line and garnish my wages one after another.

I made the decision to file chapter 13, so that I could put an end to the insane fees, and interest charges. For me, it would mean that I would be able to put closure to this mess in 5 years, rather than 25 years.

My plan was set so that I would pay the full amount of my car, and then 10% to all other creditors . . . totaling about $28,000 over 5 years. I would be paying $480 a month directly out of my check before I ever saw it.

For me, it was the best thing . . Because I just got my big raise, and therefore never really knowing what it was like to see a full check, I never missed the money that was taken out lol.

My credit tanked to the low 500's. Cash was a way of life.

Then, about 2 years into my BK, I suddenly got a pre approved credit card from WAMU (God bless WAMU). My CS was around 630 at that time. To my SHOCK, they approved me for $4,500 CL.

I was careful with my card. Charged dinner and paid it off next month. Sometimes I let it role for 3 months . . carrying a balance, but always paid on time.

Soon after, I got pre approved for another WAMU card, also at $4,500 CL. I used this card in the same way as the first . . VERY carefully and strategically.

Soon, 4 more cards followed. . . . Credit One ($1,000) JCP ($1,000), Orchard ($300), Discover ($300).

I stuck to my plan. Used these cards carefully. Only when I knew I had the cash to pay them off would I use them.

In the middle of a bk13, my credit score rose .. . 640, 650, 680, 710.

My chapter 13 is in its final stages. I have paid the base plan, and am awaiting to fall into "closing" status. I have a decent credit score for someone just walking out of BK 13.

Over the last few years, I saw some raises at work . . I am now in the 60k range. My life is much more stable. No more living check to check . . and hoping the gas fumes in my car last until payday.

My car, which was brand new at time of bk filing, is now all paid off. I paid it in full, plus 9% interest in the bk plan. So, I actually feel good about that. I have a car, in great condition that is worth about $8,000 and I owe nothing.

6 months ago, as I knew my bk was winding down, I went to my credit union and took out a secured $5,000 loan (I gave them $5,000 in a secured account, and then took out a $5,000 loan. This is the only way a bank will give a loan to someone in open BK). BUT, this will help me improve my credit and build a rapport with the credit union. FICO will not know this is a secured loan. They will only see that a loan was issued from a bank. Having this type of loan instantly boosted my credit 30 points.

As soon as my BK closes, I am buying a car. A nice car. used, but loaded. Something to reward myself, yet something I can afford. I think (and hope) that I am in a good position to get an auto loan at a good APR. Or at least a competitive APR for someone who just walked out of Chap 13.

Hard work pays off. It is a long road. For those who are just beginning, I can recommend that you use the next 60 months to start taking steps to rebuild . . rebuild . . rebuild.

Don't shoot for a credit card in the first 2 years, as you will certainly get declined. Don't apply for more than 4 cards a year, or it will hurt your credit. Go slow. . . but steady.

you CAN have your life back, when this is over!!

Best of luck