BK..now what??

Reasonable would be in about 2 years, prime will take longer (anywhere between 4-7 years). Keep in mind that accounts included in a BK will stay on your report for 7 years and the public record of BK will stay for 10 years. A lot of people have the misconception that a BK falls off in 7 years.

One thing you want to do is put some money in the bank. You want savings in case of emergencies. Another reason is you need money to get secured credit cards.

We are a year out of Bk. Here is what we have done. Very first thing we did was put money in the bank. What a great feeling that is to be saving money when you could not before.

We had some cards that had no balances on them when we filed, so we did not include them. We very carefully utilized them. We put something we needed on each one, carried the balance over a few months before paying it off. Having credit and paying off the balance does not establish a proper payment history.

You will want to get your credit reports and check the accuracy. You would not believe how much gets messed up after a BK.

Try to open up savings and checking accounts at a credit union. They are probably your best choice for opening accounts post BK. You will find out that some banks will deny accounts to you after a BK. Some do run credit checks before opening accounts so it is best to check up front before applying for a new bank account. Also, you will want to open a savings secured installment loan with a credit union, but make sure they report to the loan history to the credit bureau before doing so. The CU is also a great resource for secured credit cards. Their rates are lower than secured cards from other CC companies. We have two CU secured installment loans and a Visa from one of the CU's.

Try getting other secured cards. FCNB is a good place to start. They will give you a credit line up to 5 times your deposit. I believe their minimum is $100. Their site is www.fcnb.com. Try Capital One. They are very good as well, the only downside to Cap 1 is they do not report your credit limit. I have heard some have had success with Orchard bank. You might even want to try Providian although I would not unless you are really desperate. I would avoid any company you see or that sends you an offer for a secured or unsecured card with a lot of fees (for example $100 origination fee, $89 processing fee, and a monthly participation fee which usually ends up costing you about $72 a year and then they add an additional annual membership fee on top of that...fees, fees, fees up the ying yang). Also. avoid Cross Country Bank like the plague, they have a very bad reputation of posting your payments late.

Stay away from any prime cards such as Chase, Citibank, Amex, etc. You will not be able to get any of these. The computer will automatically deny you for a BK and more likely than not, the supervisor will not override a BK.

We have been fortunate to have obtained a couple of unsecured cards, but I consider us very, very lucky. They are not prime cards, but they do not charge fee after fee other than an annual fee and a higher interest rate (18.9%). With proper utilization and good payments you should be okay after about two years.

Also go to Borders or Barnes & Noble and either pick up or read the book "After Bankruptcy" by Stephen Snyder. The only thing he does not advocate are loans through credit union's but that is because at one time, CU's did not report loan activity to the CRA's.

 

Out of curosity , what are the cards with the zero balance that survied your bk?

 

Sears had a zero balance, but closed my account out when they found out I had filed. The BK dept. told me it was not the BK but because the card had a zero balance. Go figure. Anyway, that was the one card I did not want to lose (I know high interest, etc., but it has come in handy). I called them up earlier this year and asked if they could take a look at my history with them and perhaps give me a new account with a low limit. They did better than that, they re-instated my old account and old credit line. I was so happy! I have used them and paid them wisely and am grateful for what they did for me.

One Visa, Amoco, Shell, Mobil, and a few department store cards (Wal-Mart, Spiegel). Home Depot does account reviews and will close you out regardless if you filed BK or not with them. They will report is as included in BK even if it was not included. I had a zero balance with them and that one did not survive, but I also did not file them either.

BTW the reason most of cards survived was because of the zero balances. I filed BK due to medical reasons and a loss of income because I could not go back to work full time. What I did end up having to file was installment loans that were secured. I had two cars, one of which was returned. I lost my house because of the fact that the property taxes more than doubled causing my mortgage payment to go out of sight. It was either pay the mortgage or eat and because of my health, we chose to eat. Filing BK was not an easy choice, but when you have secured debt and the creditors will not negotiate because the debt is secured they have got you. It literally made me even sicker when I was going through the BK. But all in all we had no choice and have learned a lot. If it were just credit card debt, I would not have filed and worked something out.