Life after chapter seven

"Is it safe to assume that I'm now black-listed with all of those financial institutions?"

CHASE and AMEX...YES!!! This I know for sure. Even years down the line make sure you check who is financing your loan (ie., furniture, electronics, etc. because if it's Chase you will be denied). My wife worked for AMEX in the credit department and I know for a fact that the first thing AMEX will see is the BK and deny.


"Are there any other credit-building cards that offer a more reasonable recurring cost?"

There are more bad things that good about Capitol One for most but my experience with them has been super. I'd wait about 6 mo. or 1 yr then apply. Yes your limit will be $300.00 but you may get lucky. My first attempt applying with them after about 1 year gave me a Cap1 card with a $2200 CL. I'd also check into Patelco Credit Union. Lots of good things about them. Orchard Bank has also been good.

"Does anyone have any suggestions on the best path moving forward to re-establish a normal credit profile?"

Understand that for a few years you will not get the best rates on credit items but it's not death. We bought a new house 1 year post BK (7.9%) and refi'd 3 years later for 5.7%. I hold enough credit cards to rebuild (ie. Lowes, Cap1, Orchard, Dillards, Exxon Mobile, Zales, Jareds, Patelco) although it took a little time.

"What experience does everyone have with the time period before your bankruptcy is not regarded significantly when reviewing your credit?"

I'm at 5 years post and it still is considered dramatically in all my financial dealings. I'm hoping at the 7 year mark it will be factored less and less and then when it comes off at 10 years I will rejoice. Sure I can get credit cards but not Chase, AMEX, etc., and the ones I get have high rates. Although I do get the occasional 0% for 6 months approvals and checks from my established accounts (Cap1, Orchard Bank) but that took 5 years. So maybe 5 years it is easing up.

Time heals all wounds, even BK. So keep you eyes focused forward not backward. But don't toss out the rear view mirror because every now and then you need to take a peek back to remember where you've been.

 

Other thoughts, start the clean up process early. Set monthly goals and stick to them. I think I got credit spree happy and now I have a ton of inquiries on Equifax (much higher than TU or Experian). Also, while I was building credit post BK I keep my revolving balances too high. I will never exceed 7% again. I didn't refi my student loans; so I have like 5 to 6 different loans reporting. Follow a PIF lifestyle.

 

First of all, sorry to hear about your misfortune.. It sound as though you have had the worst already happen.. It will get better.. One word of caution, is try to use cash as much as possible and concentrate on building up your savings, ect.. Try not to use revolving credit cards, ect.. Just have one for car rentals, ect.. In regards to the current rates, ect that you have on your household card.. That is one of the pitfalls of Bankruptsy.. Best Of Luck
rj

 

How you doing Badyear? Same events here!!!

Gone are the AMEX Gold, Visa Signature, the $400K condo, the $40K german sedan - gone is the Chap 13 trying to save some things - the Chap 7 just got DISCHARGED! 3 days later, today, I receive my "Congrats on your BK Chap 7 Discharge"

"Now that you have taken the initiative and reduced your outstanding debts our national sub-prime lenders are eager to extend an auto loan to individuals with recent discharged bankruptcy"

By the way, gone is the cancer too! The hell with the material things - I can get them back. Apparently, credit will not be too big of an issue;

FYI Badyear, all you do is pay back AMEX and you get a new account with them.

Good luck - the bad is done and on we go
Oaktown888

 

AMEX will re-establish?

 

How many credit cards to get though?

Hi guys & Congrats Oak!

I just got my discharge from Ch7 yesterday. Woohoo.. My BK was actually from getting swindled by a real estate guy (and my own naivete).

Anyway, my good ole score of 775 from this spring has now dropped about 200 points.

I buy most things with cash, so I pay off my balances each month - so I don't need a car loan, etc. But should I be shooting for acquiring 7-8 cards?

I have 3 right now (Orchard, BofA, Cap1) and I want to know how many I should shoot for? (I'll be using them very responsibly)

dc

 

I'm in the same boat, sort of. I filed BK7 a month ago, so no discharge as of yet. But, I'm hopeful. I did not use a lawyer, I went thru a paralegal. She seems to be fairly knowlegable about the process. She mentioned that she would need to send notifications to the CRs to let them know about the BK so they can remove the derogs from my reports. Is that true? I thought they would be notified by the courts.

Anyway, my question is what sub-prime, department store, gas card do I have the best shot with immediately following the discharge?

 

Me again. I just got my discharge letter in the mail a couple of days ago. WooHoo! Should I be sending letters to the CRAs to make sure they are reporting creditors that were included in the BK correctly? If so, does anybody have a template or a sample letter I can send them? Also, I just got financed for a new car loan. The interest is crazy high, but I needed a car and I figure I'll keep it for a year and then hopefully refi with a lower rate.

One of the finance guys at the car lot said that I should immediately apply with Orchard bank to begin rebuilding my credit. Is this a good idea? I'm not really interested in the credit, I just want to start to build a good, clean history.

Oh yeah, and there are student loans that are in default, but were not included in the BK. Is there any hope?

 

Here's a copy of my recent post to another Member that answers a lot of your questions:

My husband and I filed Chapter 7 Bankruptcy, discharged July 2004, almost 3 years ago and immediately went to work on improving our credit scores. Even before our case was discharged, we were approved for a car loan on a 6 month old car (still financed as new since it was used as a Lease by the Dealer and never sold before) by Key Bank at 16.99%. I was thrilled with this at the time since I had a 10 year old car and knew my timely payments would improve our scores.

My husband's truck was refinanced through a Redemption Loan through the BK7 for market value ($5,200 instead of the previously owed $16,000) at 24.99%. Of course, this was a very high interest rate but we chopped off more than 2/3 of the amount owed on the vehicle and were set up with low payments for 3 years. Again, we paid every month either on-time or early, never late, to improve our scores.

We both applied and got Orchard Bank credit cards with $300 limits in Nov. 2004, 4 months after our discharge. We used both our cards regularly to establish credit history but tried to stay below 50% usage of total credit and always paid on time and more than the minimum, if not the full balance. They most important thing in rebuilding your credit score is to actually use the credit you have in a responsible way to prove to the creditors that you can be "trusted" with more credit, in addition to increasing your score.

It took awhile for Orchard Bank to increase our credit limits to $500 (January 2006), over a year and a half. Here's what Orchard Bank advised us about credit limit increases (received in writing):

"You can improve your chances of receiving an increase by:
*Making payments on time
*Staying within your established credit limit
*Making more than the minimum payment when you can"
(They will definately not increase your credit limit before one year history)

I also received another Orchard Bank VISA in December 2005 ($300 starting limit - now at $450) and Capitol One Platinum MC in March 2005 ($500 limit). I called Capitol One today when I realized that I have never received a credit limit increase and was told by the Rep that I was not approved for an increase even though my credit payment history is perfect. I explained to this Rep how all of the other cards have been increased, including new one I've received which much higher limits (see below) and I didn't understand why Capitol One refused an increase. He stated, "Capitol One has made a business decision which involves being very conservative in issuing credit and increasing limits". Wow, talk about being conservative. He said I would be receiving a letter explaining why I was denied an increase and I have to assume that I am being "red flagged" with the BK on my record. Or Capitol One only wants consumers with over 700 scores. Hmmm, guess I won't be using them much. BUT, I won't officially close the Capitol One account since that would reduce my available credit, affecting my debt ratio %, and lowering my overall credit score.

The best credit cards we got after the BK were with Direct Merchant in November 2005. I received a $1000 limit and my DH received only $400. Not sure why but I've always had more credit history and trade lines than him. 3 short months later, Direct Merchant automatically increased our limits to $1500 and $600, respectfully. Followed by further increases to $2000 on mine in October 2006 (less than a year after receiving the card) and $1100 on my hubby's in January 2007 (again, less then my limit and 3 months later).

Since we were getting higher limits with existing cards and our credit scores had improved greatly over these 2 years, we decided to apply for another credit card with a better interest rate so we would have more available credit for emergencies. 2 months ago, in January, we were approved for cards with Juniper at 11.99% fixed and no annual fee with a $3500 limit for me and $2500 for my hubby. (Poor guy, never gets a higher limit than me, lol.)

Since an important part of your FICO score calculations includes the % debt ratio to available credit, it is important to increase your limits and/or add another card or two. Adding each other as authorized users will add a trade line to your credit report for each card so you might want to do that to add more available credit (better % ratio) to each of your reports. I know my husband is an authorized user for my Direct Merchant $2000 card and it is listed as a trade line on his credit report.

You also mentioned in your post that all of your cards have little balances, nothing over $50, which you pay monthly on time. My question to you is, what was your highest balance on each card (% to available)? Have you been using the cards enough? If you have a $300 card, you need to use it around 50% average ($150) to show that you can pay it back. The bigger Care card with $2700 limit.....what is the most you have ever charged on it, the highest balance? You don't need to have 50% charged ALL the time, but you have to do it one or twice to prove that your are credit trustworthy. Why would someone give you more money/credit if you've never shown since your BK, that you can pay it back? You know what I mean?

Try charging something that you already have the cash for in your savings or checking account. This way you can show that you have used a higher amount of credit and you paid it back quickly and on time.

The other part is reviewing your credit reports to see if there are any errors or trade lines you can dispute. Have you seen your credit reports recently or since your BK? I actually paid a lawyer who specializes in BK repair to dispute some of our negative trade lines which helped increase our scores. I only paid him for 6 months, so all of the negatives were not finished being disputed, eliminated and/or corrected so our scores are not as high as they should be (639 for me and 657 for hubby as of Jan. 2007).

In December 2006, when reviewing our reports again, I found a new collection account for a medical bill. Turns out a bill from an emergency room visit that was covered by insurance was not processed correctly, was never paid, and the hospital turned it over to collections. I never received notice of the bill (ever) or the collections since we moved out of state right after the ER visit. I immediately got on the phone with the Collection Agency, determined what the bill was for, called my Insurance Company, and submit the necessary paperwork for the bill to be paid. I am waiting and checking back to make sure it is paid in full and most importantly, that the trade line is removed. Hopefully, once that is accomplished, our scores will increase more. It is important to see each of your credit reports on a regular basis to check for accuracies, even if you have to pay for the reports.

Ok, I think my post is long enough, lol. Hope some of this information is helpful to you. Good Luck!

I forgot to include the rest of our history with auto loans. After receiving my new car loan at 16.9% at discharge, my husband traded in his '01 F150 one year later for an '03 Ford Ranger at 16.9%, followed by my trade in and upgrade another year later to an '06 Pontiac G6 financed by GMAC (A lender) at 8.55%. About 6 months ago, my husband traded in the used Ranger for a new '07 Chevy Silverado financed by WFS at 9.9%. Now, most people would not be comfortable with trading in or getting new cars so often, but we have found that each new car paid off the old loan, adding another positive trade line to our reports, improving our credit score and progressively giving us lower auto loan interest rates with better lenders. We feel comfortable where we are at now with our rates and new cars so we can wait a couple of years and see what our next best step will be.