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Thread: building credit back directly after a chapter 13 filing.

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    Banned i.breathe.in's Avatar
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    Default building credit back directly after a chapter 13 filing.

    im in the middle of paying my chapter 13 off (ok about 3 months in on 6 yrs haa.)

    is it possible to start building my credit back up now or no? im not allowed a credit card till after the 13 is paid off and closed so how would i do this?

    i know paying your bills on time doesnt build your credit, but it can hurt your credit if you dont on time.

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    Default Re: building credit back directly after a chapter 13 filing.

    basically, you can't do anything at this point in time that will positively impact your credit rating.

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    Default Re: building credit back directly after a chapter 13 filing.

    good to know.

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    Default Re: building credit back directly after a chapter 13 filing.

    Short story: default on the 13, get it changed to a 7 and you're done in 90 days. Either way you're stuck with an empirica of about 535, but you don't have to wait five years +. As a 7, life is simple: you keep it, you pay for it. You give it back, you don't pay for it. It won't be long before banks court you again because you now have no financial obligations and you're income hasn't decreased (all other things being equal). Thus, you have a shitload of disposable income and you can't file BK7 again for seven years. You're beautiful. If you want to be even more cute, stash a couple grand for several months so you can buy yourself a car and pay cash. Remember that any financial transaction performed within 90 days before your filing. Four months down the road you can rest assured their are institutions that will finance you, but you'll pay 19% for a car loan and your first credit card will be secured with a $500 limit.;D

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    Default Re: building credit back directly after a chapter 13 filing.

    Quote Originally Posted by alwaysamission View Post
    Short story: default on the 13, get it changed to a 7 and you're done in 90 days. Either way you're stuck with an empirica of about 535, but you don't have to wait five years +. As a 7, life is simple: you keep it, you pay for it. You give it back, you don't pay for it. It won't be long before banks court you again because you now have no financial obligations and you're income hasn't decreased (all other things being equal). Thus, you have a shitload of disposable income and you can't file BK7 again for seven years. You're beautiful. If you want to be even more cute, stash a couple grand for several months so you can buy yourself a car and pay cash. Remember that any financial transaction performed within 90 days before your filing. Four months down the road you can rest assured their are institutions that will finance you, but you'll pay 19% for a car loan and your first credit card will be secured with a $500 limit.;D
    well heres the thing if i do that, ill have to give up my car....and i cant/wont live without it.

    also if i switch it to a chapter 7, do i get what i paid in back? i have 3 years of back taxes ont he apyment plan too, so thats also a factor.

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    Default Re: building credit back directly after a chapter 13 filing.

    You're not expected to ride the bus if you file Bk. I've seen a judge give back a Lamborghini "because the borrower needed it for work." I'm assuming you have a loan or lease on your car.

    If you mean does the court return $ paid into a bk13 plan, hell no, goofball. They're not going to wash away what is probably $30k-100k or more in debt and then write you a check! Can't blame ya for tryin', but the world isn't THAT stupid.

    Your taxes will not likely be wiped in either case, but your attorney ought to tell you this stuff. You're talking income taxes, right? If you're talking R/E taxes, they stay with the house so you can leave them behind. Remember that the people who write the bills and pass the laws get PAID with those taxes.

    Did your attorney explain any of this to you? The fee is supposed to cover "advising" a client too, not just filing the bloody paperwork.

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    Default Re: building credit back directly after a chapter 13 filing.

    However, if I'm not mistaken, defaulting on a Chapter 13 bankruptcy with conversion to Chapter 7 also means forfeiting any remaining assets ... with the only limited exceptions being houses and cars as covered under the bankruptcy laws of individual states (and now limited in 'generosity' by federal bankruptcy statutes as well). It also means reducing your income to the point where you are now earning less than the 'median income' for your particular area for a period of 6 months prior to the refiling.

    However I completely agree with the assessment that you will be able to rebuild credit much faster after filing a Chapter 7 bankruptcy ... for the simple reason that instead of a 5 year ordeal of court ordered reduced payments to creditors your debts are immediately erased.

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    Default Re: building credit back directly after a chapter 13 filing.

    Unless she's claiming a pretty serious amount of income, she'll qual for a 7 (or what we affectionately call a BK20 after bouncing from the 13). In theory, any un encumbered, unusually valuable assets would be forfeited. In practice however, this simply doesn't happen. The # of bankruptcies that funnelled thru the courts 5 years ago was way, way too much for anyone to spend any time carefully ferretting out one's assets. Since the "reform," it's world record pace. File the paperwork, ride through the system, start fresh. If any unreported assets are titled or UCC'd, they'll likely find them, but other than that, not a chance. In other words, if you've got 400k worth of art in your basement, and there's no VERY public record of your having purchased it, paid taxes on it, and the lenders your stiffing don't a)know about it and b)have the intellect, time and desire to bitch about it, you're all good. Common items of value such as TV's, stereos, clothing, etc are irrelevent to the event. Be conservative about their value, but don't worry beyond that. (RAWHIDE!!! I always wanted to say that and snap my whip. Yee Haw).

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