my husband and I filed Chapter13 in March 2000. We are paying it back on a five year plan, and our last payment is scheduled for March 2005 (already paid 3 years worth now! WOW!!!). About July or August, my husband will be exiting from the military, and we will receive a lump sum check for around $50,000, and another lump sum in April of next year for around $22,000. Best we can figure, we will owe about $23,500 by August when we get the first lump sum. I know we will have to get an official amount from the bankruptcy court. Our plan is to pay off the chap 13 when we get the $50K. That will leave us with almost $27,000 left. Our van (99) and truck (85) will then both be released from the bankruptcy court. We plan to immediately put an add in the paper to sell them. The van should go for $7-8K, and the truck for around $1000-1500. We will take the money from the sale of the two of those, and buy hubby a dependable used truck for cash. We recently bought me a dependable used Mercury Grand Marquis for cash, and it is paid for, free and clear. Our home will also be free and clear. It is a manufactured home that is in a trailer park. It was new in 1998, and a great house, but we are thinking about upgrading. The reason? We want to buy land, instead of living in a trailer park. In order to move our home, it will cost around $8,000. So, instead, we are contemplating trading our home back to the dealer in trade for a new home from them in a package deal with land, setting it up, etc. Then THEY can sell our current home to someone who doesn't mind it being in a trailer park, and we are not out the astronomical amount of $$$ to move it. I'm still checking into all the details on this. My question...my husband is a disabled veteran. We already have a set check coming in from social security, and soon will from the VA. So our income is pretty reliable, and consistant. And we also will be able to get a VA loan. However, I know we have to rebuild our credit somewhat first. My question is how best to do this. When we sell the van and truck, should we take the $8-10K and pay like half down on a truck for hubby, and finance the other half to show rebuild our credit for a year or so, making larger payments, thereby paying it off in 12 months? Is that the easiest way to rebuild credit? Also, how long should it take to rebuild after a Chapter 13? Is it viewed differently than a Chap 7 because we made the effort to pay at least part of it back? I REALLY want to buy land as soon as we can. I'm even thinking about breaking down and putting my kids in public school (GASP...horror of horrors!!!) if we get into an okay school district (there are no GOOD public schools in this area). But I just don't want to spend $8,000 to move our home, especially when that is about the difference it would be to upgrade to a new home. ANY thoughts would be great, as I'm not the most financially astute person around!
get rid of the trailer and buy a home on solid ground. Why invest in something that isn't going to appreciate in value? You are making a mistake from day one if you buy another trailer. They are garbage. You can get a decent home for about the same price! Also, if anyone ever files a bankruptcy, don't EVER file a Chapter 13. Its just not worth it, you can't do a thing unless its been discharged for a while. 13 doesn't get discharged until it is paid off. Bogus isn't it?
I did a 13 in 1996 so I understand the issues that you have. Credit building for 13 starts with your final payment to the trustee. There are going to be people who will tell you that you should have filed 7 instead but you have choose 13 so your path is set. The only upside is that your 13 will be off your credit reports in 7 years from the date you filed as oppose to people who filed 7 must wait 10 years. Always try to buy property but on property that you are happy with. Talk to a mortgage broker as soon as your 13 repayment plan is completed. Keep certified copies as brokers will need them. You can always buy a auto on terms, which is a good thing. But that is one part of the rebuilding process, you also need credit cards (M/C or Visa) and one department store cc. These components will help your FICO in the long run. Start with a secured credit card, I started with Cap 1 and Providian. Look on this site for suggestions as I understand Cap 1 and Providian are trying to get out of the sub-prime market. Make sure the secured credit card company reports as unsecured and that the fees are reasonable, no Cross Country Bank. I would also suggest saving for a decent downpayment on your home as this will help your chances of getting a home loan at a decent rate. Also a steady source of income will be in your favor. When you are ready to loan shop pull your own reports and show them to the broker first and get a basic idea from them as to where you stand. I imagine this will occur 2-3 months after you have completed your bk-13. If you have any more questions just ask. Best regards, Mirage
Re: Re: rebuilding credit after Chap 13? I didn't necessarily call her home garbage. I said trailers are garbage. I say that because you essentially throw your money away when you buy one. They NEVER appreciate in value!
