Near the End!!

[bpokey]

How I wish I would have found this community sooner. There is some really great info on here.

I'm due to be discharged on June 17th 2011. How's it work? that's vague enough of a question isn't it? Some more specific questions I guess are in order.

1. How long after June 17th will the automatic deduction stop?
2. how long after that will the discharge be granted?
3. At what point am I able to go about the re-building process and get a card/car loan/mortgage? After June 17th but before the the official discharge is in my hands or do I need to wait?

I've heard horror stories of discharges not happening for 90 - 180 days after last payment and after five years (okay - four years six months and 14 days, but who's counting?), I'm more than eager to get my life back in order.

I need a car fairly badly but I'm babying mine to try and get through the discharge so that I don't have to go back to the trustee with another plan and only 5 payments to go.

Thanks for the help!
-BPokey

[Kuya]

Hi BPokey,

I think the main thing to realize is that all of your questions are very dependent on your specific situation, and your Trustee's individual policies. However, I can share with you what I am going through here.

I entered into a Chapter 13 that was schedules to last 60 months, whereas I make payments of $480/month. However, instead of taking monthly payments, my Trustee took biweekly deductions from my paycheck of $240.00. This meant that there were a few months each year where I actually paid more than the court appointed $480/month because some months I had 3 pay periods, rather than two. This allowed me to pay off my Chapter 13 a few months early.

Back in November, I saw that I had almost paid in the base plan amount, so I called my Trustee's office to find out what happens now? Do I keep paying for the full 60 months? How does it work?

My Trustee explained to me that when the final payment is made/deducted, it would trigger their system to kick my case over to the Audit department. There they would manually review each payment received and each payment made out to all of my creditors to ensure the plan had been fully executed. She explained that this process could take 30 - 60 days, and that they were a little behind.

My Trustee told me that because the deduction from my paycheck was voluntary (and not court ordered) I could fax her office any time and have payments stopped. She also explained that even if I did not stop payments - that I would be issued a refund for any overpayments made into my plan and that the extra money CAN NOT be issued to the creditors. I decided to let the paycheck deductions continue, because it would help me save up for a down payment on a car (I might spend it otherwise lol).

I heard nothing until January 6th. On that day, I saw that my online account (13datanetwork) showed my Trustee had marked my case status as: complete. I thought - WOW I am finally done. I was wrong. Complete only meant that I had made all of my payments into the plan, and that they believed all payments have been paid to my creditors. But the audit was still in process. Complete just implied that their audit department finally got to reviewing my case.

On January 24th, I received a letter in the mail from my Trustee . . I was soooo excited. It was finally over!! WRONG again. It was a letter congratulating me on making all my payments. It informed me that my case was considered complete - however, it was still an open case in the courts. The letter also informed me that the case would remain open - until ALL CHECKS TO CREDITORS have been cashed and processed by the Trustee's bank - or 90 days passes, whichever comes first. At that time, the Trustee will file a final report to the court and my case will become discharged.

A few days later, I received another letter in the mail. This letter informed me that the Judge signed a document to Stop taking deductions from my checks. This was good news, but still not the End, I am hoping for.

I logged into my 13datanetwork account and I can see that one check for about $1,000 is marked as refunded to me on January 21st, and a second check for $240 was makred as refunded to me on January 27th - although none of these monies has officially reached my mailbox just yet.

For me, it could be any day. Or it could be April lol. Who knows. Apparently the creditors have 90 days to cash the final checks. Hopefully my creditors all cash their checks soon.

As for rebuilding your credit, applying for car loan, etc:

1) Most banks will NOT finance you unless you have the discharge papers in your hand OR your credit reports have been updated to show the discharge date (this normally happens within a few days of getting discharged). At that point, you will qualify to get an auto loan but it may not be a great rate.

I spoke with a Capital One Auto Loan agent on the phone a few weeks back. He informed me that all 3 credit bureaus must show your chapter 13 as discharged, in order to qualify. If any of the credit reports show as open, you will automatically be denied.

RoadLoans.com approved me with the open BK - but it was at 20% interest. I have a credit score of 672, and I certainly believe that if I just hang in there until the Discharge shows on my credit report . . . I can get a much better rate - so I will sit tight and be patient.

Recommendation: I highly recommend that you take a weekend and walk through your credit reports. Make sure all of the information is correct. For example: If any of the creditors on your report (that WERE included in the BK) show a balance due, or delinquent, you can dispute it. They must update it to show that it was included in the BK and is not past due or balance due. I did this and my credit jumped about 50 points almost immediately.

Sit tight a little longer - it may get you a much better interest rate. Also, I have been told that banks will give you a much better rate if you buy brand new rather than used, when you have bad credit.

Good luck

[asummerplace]

Kuya, that was ane extremely helpful post - best of luck with your post-bk. Thank you for sharing.