7 vs 13

[ksgirl38]

As we are here to assist you and hopefully guide and answer questions as well as support, I have to ask, have you thought deeply about what got you here and what you need to change for your future? I am asking because (and forgive me if I am wrong) this just appears to be a quick fix for all this debt (all CC from what I gather) you don't want to deal with any longer. You are more concerned when you can buy a house, which if you have never owned one you are in for a big surprise on the financial side. When you file if you do not fix the issue that got you there (alot of credit card debt and spending habits) then you are in big trouble in the future. This appears to be a big bother to you and not a lesson to learn from at all. Have you read many of the stories here, there is alot of heartache that goes with this decision and I just don't get the feeling that it even matters to except that you cannot buy a house for 2 years (which is probably not going to happen anyway).

I do not mean to be unsupportive in any way but I am not sure you realize the impact of this decision. You seem to have a decent job so why not start the preplanning to the budget you will need to be on once you file to change the course of your financial world. This is not a quick fix nor to be taken lightly, its real life with real life consequences. The debt can go away but your attitude towards spending and CC need an adjustment, please take the time to realize your mistakes and adjust your thinking. The best of luck to you.

Unemployment was what got me here. I lost my job twice within 3 years. Once I was out of work for 9 months. Then when I started working again I was downsized after less than a year. My unemployment was just barely covering my rent and a few of the utilities which left no money for groceries, gas or any other disaster that occurred (and they did) so I was forced to rely on my credit cards. Not a choice I wanted to make, but it was the best option I had at the time. I'm single so there isn't a second income in my house. Unfortunately I don't have any family nearby either so I was pretty much on my own. I guess you do the best with what you have.

I've been wanting to buy a house for several years now. Sadly seeing that rental check go to someone else each month and not having anything to show for it is kind of frustrating. I've actually been looking quite a bit and talked to several friends about it. The rental prices around here are high so I'll actually save more money buy buying a house than renting. I guess it helps me to have a goal in mind, but with my current debt I know I won't get there unless something changes and since I'm not winning the lottery this seems to be the next best option. I tried talking to one of those debt companies, but the plan they layed out wouldn't put me that much better off than what I'm at now. It also didn't leave me any money for living expenses.

I do budget. Every month I keep a spreadsheet of every single dollar spent. I clip coupons, I take advantage of sales, I could probably teach quite a few people on this forum some ways to save. Aside from getting a higher paying job, which I am trying to do, there's not a lot more I can do unless I win the lottery or something. I've already revised my budget to look at things after the BK. Have you tried mint.com? Great website.

Have you seen my credit card statements? Aside from new charges for gas and a few for the grocery store that's about it. Every month I total up the new charges on the statement, which are very few, and add that to what I normally submit for the debt and make the payment. Sometimes more than one payment a month. Even though I'm current on all my bills I'm just not seeing it getting any better. I seem to get the impression that people think I'm out there charging up everything under the sun and that's not the case. I'm rather offended by the comment. I'm doing the best I can here, but I just don't make enough to get ahead.

So if becoming unemployed is my fault then yeah, I'll change my way of thinking about that.

[LadyInTheRed]

I'm a little confused here but that doesn't take make much for me. I know when we talked to an attorney about Chapter 13, the strongly recommended not to take on any new debt, unless absolutely necessary because it would have to be approved by the trustee. She mentioned something about making sure we had vehicles that could last through the five year payment plan. How could you buy a house during a Chapter 13? Would you already be at 100% payback to the unsecured creditors? If not, couldn't the trustee look at it, if she can afford to buy a new house, she can afford to pay more to her creditors? Couldn't that lead to a higher monthly payment then? That is just my thought process from what I've been told.

Tater, you don't sound confused to me. You seem to have a good understanding of the issues. Somebody who is paying 100% to unsecured creditors is more likely to be able to buy a house in a 13, assuming they can find a lender. We have heard of people buying a house during a Chap 13, but it is rare for the reasons you mention.

[ohiogal]

ksgirl, how much money are you planning on saving up before you buy a house? IMO (speaking as a former homeowner) you'll want to have 20% of the house's asking price for a down payment (that way you avoid the PMI), plus six months' worth of mortgage payments (in case anything happens), plus of course enough for all the utility and taxes you'll be paying that you're not paying now. You'll also want a 'cushion' in case your mortgage payments go up, and for repair and maintenance of your property.

So, let's say you're looking at a $100,000 house. To be adequately prepared for home ownership, at the time you want to buy the house you'll want to have in the bank: $20,000 for the down payment, six months of mortgage payments (let's say $500 just to have a round number), and probably another $10,000 for that cushion and emergencies.

So, I'd advise that you not start looking for a house until you have at least $33,000 in the bank. It's a lot more expensive than you think, and obviously you won't want to rely on credit cards.

Home ownership can be a lot of fun, and the more prepared you are, the less stress is involved. Good luck!

[helpmeout]

Thank you for your posts. However, while you are living in your chapter 13 world I will be living in freedom with a fresh start. For the record yes there are legal ways to have your credit repaired. I am living proof of that.

Then why is my score higher than yours? With a BK and not having had to do all of your work in getting accounts deleted?

BTW, there is no legal way to have a BK removed from your record. It's there for at least 7-10 years.

[mountanddo]

I'm rather offended by the comment.

People often are offended here when they seek advice. No one knows what your whole situation is so they rely on just what you write in your posts. I wouldn't be too offended because everyone who has posted in this thread, I can tell you, only has your best interest at heart. Good luck, I know what unemployment can do to someone that has no second income and no family to help them. You do what you have to do.

I would, however worry a little more about an emergency fund right now than at worrying about purchasing a house. The unemployment rate isn't going to get better any time soon.

[Flamingo]

I understand I went had the same question. I selected the 7. My scores before BK we around 457 now I am 640s I filed in Oct of last year and was discharged in February. I have written letters and worked my credit most of my accounts have been deleted. I have two new credit cards and I am almost ready to get a new car. I hope to have my BK removed from my credit report within the year. My boyfriend has started a credit repair business he is helping so many people. I had so many violations that I have 12 law suits against 12 different creditors totaling 12,000 (1,000 each offense). I am not trying to sell you on using him I am merely saying that you can fix your credit and get your house sooner than you think.

DAWN

First, the reason some of your accounts are missing from your credit report is that you disputed them and they are automatically removed for review during that time but will reappear if the information is correct or reappear adjusted to reflect any changes. They do not just magically disappear as many find out who think they do. Secondly, it is impossible to have a bankruptcy removed from one's credit report if one actually filed for bankruptcy. It will appear under your Public records area for 10 years from the date of filing your Chapter 7. Unfortunately, despite what you are saying, anyone can act like a credit repair company and continue disputing items hoping they will stay off of credit reports during a dispute period but eventually each credit reporting agency will state each dispute is frivolous when they have it verified with each creditor. Only the BK court itself can have the public records information removed - good luck doing that. When one files BK and if a Chapter 7, it will be there for 10 years to haunt you in some way and will never really disappear - it is public information forever and if you should by any chance try to obtain credit with a creditor/lender or an affiliate thereof at that time, you can still be denied for including them in a previous discharge even though there is no BK on your credit reports. There is no magic eraser...time is the only thing that can take care of things after a BK discharge... Best of luck to you.

[ohiogal]

<The rental prices around here are high so I'll actually save more money buy buying a house than renting. >

Actually, you probably won't. Unless the rental prices are something like $1,200/mo. and your mortgage ends up being something like $400/mo.

When you rent, you generally pay: Rent, electric, phone/TV/Internet (often bundled by the local cable company) gas (if applicable), and pet fee (if applicable). That's it.

When you own, you pay: mortgage, electric, phone/TV/Internet, gas, water, sewer, trash pickup, property taxes, lawn maintenance, repairs (small ones like a faucet leak to BIG ones like a $30,000 roof replacement), and of course any improvements you want to make so that you can sell your home like window replacement, new carpet, etc. You might also want to buy things like an alarm system, generally not needed in an apartment.

Owning a home is NEVER cheaper than renting, unless you have enough money to buy the house outright and don't carry a mortgage.