This past week we received a discharge notice from the bankruptcy court. Our lawyer says its over except we have to forward a copy of our 2010 tax return to the BR trustee. If we get a refund, he'll probably grab it. So what happens now? Is there anything we have to do to get the Big Three credit agencies to clear and update our credit status? We kept our home and one vehicle out of the BR. Payments on both have always been on time and are current. The mortgage is now under an Obama reduce your payment program on a test basis (came down $200 a month with BOA) We are planning to move back to Florida and buy a mobile home (used) if we can get a mortgage. Is this do-able? Our D/I is 34.3. We are both retired, living on several small pensions, including SS. Will appreciate any info you can provide. Thanks. Harry W
Your credit reports should update without you having to do anything. Any debt discharged in the BK should show a "0" balance with a notation that it was included in your BK, although delinquent payments may still be reported. If something hasn't updated properly, dispute it through the CRAs. Expect the BK to last for 10 years on your credit reports. In regards to getting a new mortgage in the current lending environment, you'll probably need to wait awhile until you can rebuild your credit scores back up to a respectable level. With some effort on your part, I'm guessing you may be able to do that in 2-3 years. Do you know what your current FICO scores are?
"I'm guessing you may be able to do that in 2-3 years." Yikes, We were hoping we could do it in two or three months. I don't know about mortgages, but I do know the car dealers are more than happy to arrange (expensive) credit to buy a new car. We're getting mail every day now, that starts, "Now that you've gotten thru your bankruptcy..." Our FICO score is probably rock bottom, since we stopped paying on credit cards about 9 months ago, allowed a voluntary vehicle repo as part of the BR and now have the BR in our history. How good can it be? There was a time when this would have been a complete disaster. But now, with the country's economy bottoming out, BR's at record levels, along with foreclosures, we are told all sorts of strange, never before heard of things are happening in the credit markets. I just thought you might have heard of some of these incidents (people getting mortgage credit following a BR) that heretofore would never have happened.
Your FICO score is probably in the 500s based upon what you've told me. It's not impossible to find someone who will lend you money at ridiculous rates and terms for a home, but there certainly aren't many out there these days. Besides, based upon what you just went through, I would recommend not taking on additional debt right away. Instead, focus on improving your credit scores and paying down what existing debt you do have for the time being. You scores will continue to improve as the BK gets older and your payment history remains positive.
Harry, I agree with Joshua that you would be hard press to find a lender who would give you a mortgage. From your post you mentioned being in the HAMP program. Any prospective lender would see your participation as needed relief from high mortgage payments. When I applied for this program it was a temporary relief program...however the program may be different now. IMO I would do the following to help your chances of getting a mortgage in the near future: Obtain a post BK credit report from all three bureaus with FICO scores... unless you already have them. Check your CRs for any incorrect entries and dispute them. Avoid "hardhits" to your FICO score. Keep current on your mortgage and car payments. And lastly SAVE SAVE SAVE for a downpayment. All the best to you
