BK on the horizon, Real world question

[adventurer]

After a long, expensive divorce and way too much alcohol, I think BK 7 and or 13 is on my horizon.

1) My question is timing...if I default on credit card 'A', will credit card 'B' suddenly lower my credit line or stop the card ?

2) Same question applies if I default on mortgage 'A', will mortgage 'B' be accelerated or due as they see my credit score drop ?

3) Same question as above applied to insurance on home, auto, health....???

Thank you kindly in advance for sharing your real world experiences.

[HHM]

1. It is certainly possible, (and probably likely). Most credit cards have a "universal default" provision...which means if you default on "any" credit account you have, then the card can treat you as if you defaulted on them. What typically happens is they will lower your credit limit to your existing balance (if the existing balance is relatively high) and raise your interest rate to the high twenties.

2. Typically no, unless the mortgage A and B are with the same lender. But once foreclosure proceedings begin (as a result of default on Mortgage A), then all bets are off.

3. Your rates could be affected during the routine audit which usually occurs every six months. But that has more to do with the damage you will do to your credit rating as a result of defaulting on your credit cards and mortgage than to any specific default.

[SinkingFast]

See my answers inside you post.

The info provided is all based on our own personal experience. Others may have different answers for you.

After a long, expensive divorce and way too much alcohol, I think BK 7 and or 13 is on my horizon.

1) My question is timing...if I default on credit card 'A', will credit card 'B' suddenly lower my credit line or stop the card ?

Maybe, maybe not. Sears closed our CC with them Fall of 2005 due to information they found troubling in our Credit Reports. We weren't late on anything. Just carrying high balances. None of our other Creditors reacted negatively.

When we finally had to stop paying all of our CC's, some raised their rates right away. Most did not. Some eventually raised their rates after several months of no payments. Some never changed the interest rate we were being charged. Even up to the day we filed, one of our CC's was still at 6.9% interest, others were at 9.9% and 14%. It just varies, Creditor to Creditor.

2) Same question applies if I default on mortgage 'A', will mortgage 'B' be accelerated or due as they see my credit score drop ?

Dunno about this one. We paid off our 2nd way before the real trouble started.

3) Same question as above applied to insurance on home, auto, health....???

To date, we haven't noted any significant change in rates on our insurances. Our Auto/Renter's carrier pulled our Credit when we first signed on with them after we moved last year, but not since. We renewed for 6 months Autos and 1 year Renters on 9/1 and filed BK 9/14. We hadn't paid a CC payment all year and there was no marked increase noticeable in our premiums.

Health is thru Hubby's employer so that's totally dependent on the company. Life is a COBRA from a previous employer and is a Group rate based on age. Again, no noticeable change in premium there.

Thank you kindly in advance for sharing your real world experiences.

[pandabear77]

Well, I was 48 HOURS late with a payment to one of my cards last year and my once 8% rate jumped to 24%, it's now 30%. All of my other cards followed with rate jumps, we now pay 28% to 30% on all 7 of our cards. I make a $100 payment and $80 is eaten up by fees and intrest.

Our car insurance also went up shortly after.

I do not personal experience with the other questions.

[CindyLou]

As for the car insurance. I have state farm and they have NEVER checked my credit. I called and asked and they said they do not check credit for auto/home/life insurance.

[whatamess]

Well

I was late on one account by a week, and they went up to 32%. Two other4 cards went to 23%. This month my last 14% card went to 23% as well. They have now offically forced me into bk. My minimum payments almost doubled on two.
Two also closed my account & one lowered my limit.
WAM