Bankruptcy questions

Medical Bill -Yes
Student Loan - No (if government guaranteed)
Cap1 CO - Yes

Well it it does not look good, it thows up a lot of red flags to lenders, but many people have done it and used it as a stepping stone to a better financial future

If you build up good credit after discharging BK, in 2 years you will begin to be looked upon more favorably by potential lenders

I'm not sure about this one, but it might. The fact that you have good references, they may consider you if you put down an extra month's rent in advance

The car is security for the loan, it should be listed as such, you can keep it and continue to make payments, I don't know how BK affects your future ability to obtain vehicle financing, maybe others here with BK experience will know

Once again I'm not sure about this one. You can reaffirm debts, but not sure what the CC co's will do. Others here may help you

or

perhaps these questions can best be answered by speaking with a BK Lawyer? Most offer free initial consultations where they will answer your questions

good luck!

 

Yes, you MUST include anyone you owe money to. Medical is included, you have to also list the cap1.
It will make it harder to rent, but like the other poster said, if you pay a month or 2 they will probably rent to you.

Once you file BK... NO credit card company will keep your acct open. ALL of them will close the accts and run for the hills! You have to list them all UNLESS you owe them nothing. If they find out later about the accts, you go to jail. If you have ANY card or loan with the same bank you have your checking acct at, you need to close that checking/savings acct and open a new acct at a bank NOT tied to any loan or they will wipe out your acct to pay off their loan....especially if you have direct deposit.

Before you file, you cannot have made any payments over $600 to anyone 6 months prior to filing or it is considered "Preferential". They will take that money back and split it up between the creditors. This is one question the trustee wil ask you at the 341 hearing. You have to swear to this.

We filed 5/04, discharged 7/04 and our scores are already 664 and 684, with all the IIB's listed. I suspect within a year we will be in the 700's, 2 years and we will be even higher. The past report listings of good credit stay there as GOOD credit, paid on time and as agreed.

Are you sure that you can't afford a lawyer? How much do you think it will cost? Ours was $903 with the best BK lawyer at one of the biggest firms in town. One with about 6 names in the title! They are often not anymore expensive than local yokels who are by themselves. A Lawyer can be invaluable. Ours knew the exact trustee we wanted and filed so we would get her....the ones who asks the least questions and fgiures the lawyer knows his job so why bother second guessing him! If you file yourself the trustees office will help you know what is needed and what they want from you.

If you stop paying your credit cards, will you be able to pay the lawyer from that money in a month or two? Consultations are FREE, and you can go see 15 lawyers if you want, some will talk to you and answer questions, some won't. Look up filing BK on your own on a search engine and that should get you some info $17,000 isn't really alot to file on, but if it's more than you can cover then do what's best for you

 

While most cards won't reaffirm, some will. And cards you don't owe anything on aren't included in the BK, which helped me because I had some old store cards I didn't realize were still open until I was cleaning up my credit reports after BK. I started using them, and it helped rebuild my credit -- plus because they were old accounts, they added to the length of my credit history.

 

BTW, FYI only for those filing BK and have Sears. Sears will offer to reaffirm. NEVER do it! As soon as you pay them off, the cancel the card saying that you are a bad credit risk!

 

Once you file BK... NO credit card company will keep your acct open. ALL of them will close the accts and run for the hills!

WRONG! I hade over 6 accounts when I filed in 1996 that had 0 balances on them.

If they find out later about the accts, you go to jail.

WRONG AGAIN! You don't go to jail. You really got a warp sense of what the actual law pertains don't you? Why is that?

 

Maybe two months after my brother filed BK-13 Capital One sent him a pre-approved offer for their card.. with the BK on his credit record gave him a card with a 1200 limit.

A year later his Cap One account charged off as a bad debt. Another year goes by he gets another pre-approved offer for a $2000 limit. They give him the card (they must know he has an unpaid charge off?) His new account recently charged off as a bad debt.

 

There are many BK friendly banks.

Some that I know of:

First Premier Bank
Centennial Bank (Apart of First Premier Bank)
Capital One
Cross Country Bank
American Pacific Bank
Orchard Bank
First National Bank of Marin
First National Credit Card (www.firstnationalCC.com)

 

I have a few friends who have filed BK. Some have reestablished themselves rather well. You will pay higher interest rates but banks like Household Automotive and Ford Motor Credit have BK friendly programs.

If you keep your current car loan/lease in outstanding shape before, during, and after the BK you will look great to any potential lender for new car credit.

It's always difficult renting new apartments/houses when you have something bad on your credit but if you keep your current property manager happy, make on time payments will ease your experience of renting a new place. Having him/her as a reference is very important!

Reestablish yourself with secured credit. It is very important. Secured Visa and MasterCard's. Also your credit union will offer you a share secured loan. When you are able to take $1000 dollars you can put into the credit union open a share secured loan. They will take the $1000, pledge it towards your loan, give you a loan usually at 2 or 3%.. You can do whatever you want with the loan but my advice is keep it in the bank to make your payments because you never know when you might fall short. It will NOT look good to any potential lenders having late payments after your BK. Pay off the loan within 12 months. Always good to have at least 12 month payment history.

That's my $.02

 

Here is my insight, as a BK7 filer in 2001: (my resposed are preceded by a --)

I have currently about $17,000 in credit card debt, plus a $420 bill for medical expenses.

--y file for $17k? are u ABSOLUTELY sure u cannot get money ohelp from family and draw up a contract for pmts? i only ask this because it's a long 2 yrs after filing rebuilding and a lot of let downs for $17k in debt. i trust u have really thought about it. my lawyer talked me into it...for a total of $46k, and that is bordering on worth it, for me. when all was said and done, I reaffirmed 2 car loans, and one personal loan I had joint acnt w/ a family memeber and only actually included about $20k in debt, all cc's. i would not do it again for under $50k...i'd work 2 jobs first for what I went thru.

1. Can the $420 bill be included in my debts? I know my student loans can't but am not so sure about medical bills. Also, I have an old Capital One charge-off from 1999. Can this be included?

--ALL debts need to be included, not ALL open acnts. the court will alert your creditors from what is on the BK papers u file, and from your credit report. any missing accounts are ususally cought and ther is nothing illeagle about not putting anything down. though, any debts u incurr past the date you file are YOUR RESPOSIBILITY.

2. How does a bankruptcy look on my credit report? -

--let's put it this way, the older it is the better looks. dollar values are not on the Credit report (docket info) but u r not going to be favorable to ANY creditor for at least 6-12 mos. any creditor wishing to extend u credit will GOUGE and rape you with what should be consdered usury, that is an ILLEAGLE rate of interest. be prepared for high interest rates like 10-20% if u try to buy a car or house, and 15-24.99% for cc's and signature loans. DON'T TAKE THEM if u can help it.

3. Is is true that my credit will be better in just two years as so many books and websites claim? Thoughts or personal experiences would be helpful.

--it is true if u work at it to an extent, and search for the best rates and deals u can. it's a long battle. u'll need to have an IMPECCABLE record from the date u file. NOT ONE SINGLE LATE, CHARGEOFF, TAX LEIN, OR COURT CASE. NOT ONE!

4. How does a bankruptcy affect my ability to rent an apartment in the near future, by this I mean 6 months? I've rented in the past so I do have good previous references, and I wonder if this has any weight in a future landlord's decision.

--u can probably get an aprtment, of course the larger the management company is the more they will likeley take the BK into it;s decsion to rent to u or not. look for a mom and pop apartment complex or house u can rent dirctly from the owner, as most of these places to not check your credit report, only references.

5. I am currently two years into a four-year lease on a car. Do I list the car as personal property or no, because I don't actually own it? Do I need to reaffirm this debt when I file, or should I just continue to make payments which will automatically reaffirm it anyway? How will the bankruptcy affect my ability to lease in the future? I'm leasing a VW Golf and since I have paid and will continue to pay on time, will I still be considered a preferred customer when it's time for a new car, or will this bankruptcy tarnish my spotless record with them?

--u'll need to list the car, yes. or the court will alert your finance company if u don't. and they will contact you to either include it in BK7, or reaffirm it. BK's will lessen the ease of leasing any car. why I don't know but it would be easier to buy a car with a new BK7 on your file. it's less of a risk for the owner to sell it outright. it will tarnish ur record with them, yes as it will with any creditor u have a balance with.

6. I would like to keep 3 of my 6 credit cards, the ones with low balances on them and that I can easily pay off, my Sears, my J. Crew card and my Capital One. Can I reaffirm these debts, i.e. will the creditors let me? Or will they automatically close these accounts even if I continue to pay or have a 0
balance?

--if u r going to file BK7, i would include all debts and cc's and let them go at that. it will not buy u any brownie point on ur credit reports. NONE. because there is not an dollar amount listed on the BK7 tradeline on the credit report, so any potential creditor will not see how much debt u actually filed in ur BK7 filing. they can surmise from any dollar amounts listed on the actual cc tradeline, but that's it. so, my point is that they won't look at your credit report and say, "oh Oprah had a BK7 but it was only for a total of $17k, so she is a lower risk so let's give her a lower interest rate on her new cc". it doesn't work that way, though it shoul. HOWEVER, all they see is the BK7 and they start to salivate, thinking u r desperate to to rebuild u'r credit so u will take what u can get. it doesn't matter if u filed for $17k or $117k in thier eyes, with the exception of a mortgage broker. they will sometimes look around it and into it and the like to see what the extent was, but most likely not before your two years is up and they can see an EXCELLENT CREDIT PATTERN since the BK7.

If u still want to file, it's u'r choice of course but for $17k, I would really try hard to get some cash from friends and relatives or another source first to pay the cc's down, and take a chunk out of them and then continue to pay them off. stay away from creit help companies like CCC and the like. they will not be much help and it's worse than a BK7 on ur credit report. y I dunno but it is...

just be preparred to have A LOT of people that you don't want to know you filed, to know. An employer can find out through a background check or random credit check u may consent to;

u MUST answer that question on ANY application honestly as it can come back to haunt u. it is: "have u ever filed for bankruptcy?" (that's another one that needs clarification to the "ever" part, but that's for another thread

if u do file, start immediately rebuilding and then cleaning your credit. start with Target and Wal-Mart cc's; Orchard Bank is another good one for about %15% apr, and Capital One cards...both sub-prime. u will be in the sub-prime arean for about 4 years or so. just be prepared for a long and tiring journey.

--my 1st car I bought after the BK7, 1.4 yrs later was new and at 15.5% apr. $525/mo for a freaking Toyota Matrix, a $19k car! but I refi'd 1 yr later for 8.9% and will refi this spring for lower. i still have the Orchard cc, but they will not raise the limit past $565. it's been nearly 2 yrs, and I have had the card 3 years. on the better side, i rcvd a Providian card with an $8k limit and my Nissan Xterra i bought in Feb04 is at 6%apr, so it's gotten better.

\--keep in mind I had 1 30day late prior to stopping paying on all the cc's I filed in my BK7, and none since then and it took me this long to get in better with any potential creditors. most don't care. they see the BK7 and either run, or salivate.

I been there. hope this helps.