Is there any time frame for granting credit after a bk discharge? I am considering filing for my unsecured debts, but since I'm keeping the house, I am concerned that I'll not be able to obtain financing for repairs in the future. Any suggestions?
I don't know if there's a set period of time or not. I filed for chapter 7 in April 1995 and my debts were discharged in Sept 1995. In December 1995 I leased a new car at a decent interest rate. In Feb 1996 I got a secured Visa from FCNB and a secured MC from Cap One. However, it took about 3-4 years before I could get unsecured credit cards and even 7 years later, some banks won't touch me (Discover, MBNA, Chase, BOA). I've got plat cards from Citi and Cap One, though, with good APRs. My guess is if you file and then two months later try to get unsecured credit, you'll probably have a tough time. But since you'll still own your home, I may be wrong. You might want to run this question by your attorney too. Good luck.
When I was mortgage hunting last year, I was told by several lenders that to be considered with a BK-7 it had to be more than 2 years old and no derogs since then. I purchased a new car at 12% 1.5 years after my BK-7 filing in 1991. I had no derogs during that time and 6 months later I refinanced the car with my CU at 8%. Credit cards at least back then were a bit more difficult to come by. I started my credit card rebuilding process with 2 secured credit cards from Cap One. Good luck!
The important thing post bk is to get some new credit showing after the bk.. you have to rebuild and it's counterintuitive sometimes just after filing a bk... I waited a year b/c I didn't want anything to do with the credit industry again... but once I started rebuilding the offers came in. The climate is a bit tighter right now... but there are still viable options. FCNB... work up to Cap1... Household/ Orchard are decent starter cards. Stay away from the ripoffs.. they're just not worth the hassle. the other option is to also add in a cd secured loan into the mix so you can get a new installment loan on the books too... or a new car loan.. but again, don't compromise your financial position just to get a new trade line on your reports. USAA will do a 5k or up cd secured loan with no credit check and they report to all 3 bureaus... stay away from the Ugly Ducklings of the world. 24.9 for a car is nuts. Ford is bk friendly (or at least it has been in the past)... It is surprisingly easy to rebuild when you know which companies to apply to and which to avoid. Once your bk discharges, start checking your files and disputing the errors... b/c there will be some
Thank you all for responding. This is truly very depressing. Question though, I've read from replies that secured cards are an option, which I will probably do, however, some of the companies offering these cards are the same ones I will be filing to discharge???? Will they respond favorably after the bk??? Should I just shop around for others? I'll be filing to discharge: Cap One; Household; Providian; Bank First....aren't these the same companies offering the secured accounts??? Just confused. Thanks for all the insight...
Mary, Are you a member of a credit union? Our credit union has an excellent secured credit card program. Also, you might want to have a close friend or relative add you as an authorized user to one of their credit card accounts. It should show up on your cr and give your score a boost. However, you might want to get some more input from other members of the board on this suggestion. The bank that financed my first new car after BK-7 was First Union. What I did was wrote a letter explaning the circumstances that lead me to file for BK. What the finance manager at the dealership explained to me back in 93 was that their banks will accept a certain amount of risk in return for all the good loans they send their way. However, it has to be processed by a human being rather then a computer like a prime loan is. Marie is correct about checking your credit once your BK is discharged. I had to go back in forth with the big three (especially Equifax) to get my cr straight. Instead of showing my accounts included in BK, they had all the negative info listed in addition to a BK filing. Took a few months but I sorted it all out. The best of luck to you.
I wouldn't apply to a bank for a secured card if you're planning to include them in your BK filing. You're almost guaranteed to get turned down, even if it's for a secured account. I included Discover as one of my creditors 7 yrs ago when I filed, and they turned me down for a "pre-approved" card 3 months ago. However, two weeks ago I was approved for a 5K Citi card (who I did not include as a creditor when I filed). There are lots of banks that offer secured cards. Ask around at this message board and you'll get a lot of responses. I would just apply with them. Just make sure you avoid the cards with all the outrageous fees (set-up charge, monthly fee, membership fee, etc...sometimes over $200 just to open the account). Good luck.
