Earlier this week, I approached the board, with the possibility of filing for bankruptcy, I still may do so, but I was wondering how would that affect my ability to buy a home in a few years, I mean, would it look better to have the debts discharged in ch7, than to just have them charged off on my credit report?
I just read your earlier posts. The BK would be a major factor in qualification, but I beleive that it would be better than a string of unpaid debts lingering on your CRs.
BK is bad, but it is better than C.C.C. I have heard horror stories about people having paid in full with C.C.C. and have NO CREDIT CARDS ANY MORE, and can't buy a house EVEN AFTER THREE YEARS DEBT FREE!!! ON THE OTHER HAND OTHER PEOPLE WITH A BK COULD BUY A HOUSE AFTER ONE YEAR!!!
Does it matter what kind of debt? Most of my debt is from cash advances, taken to pay other creditors, I really have nothing to show for my debt. It bothers me to have to resort to BK, it makes me feel like a loser, but I am not. I just can't get ahead, no matter what I do. Also, is there a set time frame I have to be past due on ALL accounts? To file BK?
I don't believe that cash advances would be treated any differently than regular purchases. I also don't think that accounts must be ALL be aged to a certain point. But I am not an attorney. My advice would be to seek out one. Most here in WA will give you a free consultation to determine if BK is the avenue for you.
There is no time frame required for filing bk. Did you read my post to you the other day? You must list all debts, however, you can chose to reaffirm (continue to use and pay) certain accounts. As I said previously, with your income compared to all your debts you listed, you will never catch up. Do it! Use it as a second chance and the opportunity to start over. Once you file, no debtor can contact you or file legal actions against you. It will be a big relief.BK is not something to be taken lightly, but in your case, it is necessary. If you file, list every single debt. If you keep your record clean for 18-24 months and re-establish some credit, you should be able to qualify for a home loan. Good luck.
I filed BK in 1996 and was approved for a mortgage in 2000. The interest and downpayment was high, but the monthly payments were still lower than rent and I had the option to re-finance after a year. There many subprime mortgage lenders out there, and if you keep your nose clean for at least 36 months after a BK, you may be able to get FHA financing. I actually found it was harder to get a car financed than a house with a BK! Since your car is new you don't have that to worry about, and if you are concerned about having credit after the bk, maybe you can reaffirm some of your smaller debts (you might want to keep Citibank) and work like a dog to pay them back. This shouldn't be too hard to do since the majority of your serious debts will be discharged. Personally, I would concentrate on the situatuation at hand, which is that you have some judgments and these creditors could garnish, rather than worry about something that may be several years down the roadd.
The answer too you're first question is simple. Unless you can pay off they accounts before you're home purchase, you will never get the mortgage loan. At least with the BK, you have a shot in a year or to. And from the sounds of it, there is no way you will be able to pay off the debts, so they will remain on you're reports for 7 years, and you may get judgments, which will remain for an additional 7 years from the date entered. As to the second question, I don't think it makes any difference what type of bills they are. If most of the cash advances and purchases had been recent, it may appear that you were attempting to run up you're credit, and then declare BK (free money). If this were actually the case, they may try to prove fraud.
I have known people to get behind on house and car payments and when they want to foreclose or repossess,these people run to attn'y and file BK to stop both. I filed Bk due to extreme medical bills($100,00.00) in '93 and when I went to hearing, the judge dismissed the case because of the reason for medical bills and told te creditors to take a loss and no reporting to CB's. Was my attorney surprized because his fees were included and he was told to take a loss also and was scolded for suggesting I file.
But failed to say that the BK shows on reports,but doesn't report dismissed. Just gotten this removed from two credit reports,but Experian is tough to deal with. They refuse to remove.
That's very interesting. I had a bk removed from equifax with no problem. Experian refused saying they had verified it . I called them and asked who they spoke with, of course they couldn't tell me. I called the bankruptcy court who told me any communication from a crb would be noted in my file. She told me to hold on while she checked. She came back and said nothing here. I called experian back and told them this and told them I didn't believe they tried to verify it and wanted to dispute it again. The rep took the request over the phone. Within 1 week I got an updated report showing it removed. Trans Union is the one giving me problems.
If you got the cash advances w/in 30-180 days of filing BKY, the affected creditors could contest. At the least it means more $$ in attorney fees for you, at worst they get excluded from your BK. It's ironic, but in most cases you're better off declaring BKY versus settling (% on the $) your debts. Depending on your reason for filing (loss of job, loss of hours, medical, divorce, etc.) you shouldn't have a problem getting a mortgage in >2 years AS LONG AS YOU start re-establishing credit immediately. You also do NOT have to list all your debts - if you don't list 'em, they don't get included. If you have an account or two that are with low balances, keep paying them and keep them off your BKY. Good luck!
I am not 100% sure, but I was told by an attorney that every debt had to be listed, but that you could reaffirm the debt and therefore keep the account. Might want to double check on this one before you file a bk.
My wife and I were recently (October,2000) discharged from Chapter 13 and this past summer (June,2000) purchased a 130K house without any problem. I can't tell you if Chap 7 is worse, but our lender said that our credit looked better because of the bankruptcy. We did not abide by all the rules of Chap 13, because we did establish credit from Providian (excellent company) while under the plan. Which is a BIG no-no. We could have had our bankruptcy dismissed and been responsible for the debts. Be careful in you decision about bankruptcy, try a credit counseling agency first to see if they can help you deal with your bill collectors. I would file only as a last resort.....Good Luck!
