A rant and your 2014 goals?

[PhillyGuy]

Rant: Since I filed bk7, I have been on this site and others reading and getting great advice from everyone.

Here is my concern, you filed bk because of debt, most people cc debt. Then after your debt is wiped clean, I see people applying for numerous cc's and store charges, etc.... Why do you need 4, 5, 12 to 13 cc's and store charges to rebuild credit? Isn't that how you got in this mess in the first place?

I didn't file due to cc debt. But currently do not have any cc's, just a Macy's store card that survived the bk7. If you get one or two cards, don't run them up and pay them on time, wouldn't that help your scores the same, instead of getting all those different cc's and store cards?



2014 Goals: Have my bk7 asset case finally close before my years anniversary of my discharge (March), Apply for one (1) unsecured cc and get approved for over $1000. Have all three FICO scores over 700 (One there, 2 to go) by December 31, 2014, have $12,000 in my emergency account.

Happy New Year to all, lets make it a good one!

[Drazil65]

Hi, I am not sure "most" people filed because of CC's alone BUT I do notice there is a fair amount of people that post about wanting CC immediately after filing or discharge. Our chp 7 was due to a mixed bag of events (job loss, debt, out of state rental home tenant moved out etc) which eventually put us where we felt the best business decision we could make for our future was chapter 7. Once we started talking about and researching bky we stopped paying the CC and mortgage on the rental (stayed current on our primary to do a stay and pay at the time) and went to a cash basis living standard. This was well over 2 yrs ago (filed Dec. 2011) and have stuck to that for living expenses and purchases. We save for what we want. We are now renters, did a short sale on our primary last year and have one car payment that we kept through the chp 7 proceedings. We live a simple life and save for everything. We are going on our second vacation since discharge and paid all cash for hotels etc. We have a savings/emergency acct and retirement accts (we had neither when things were paycheck to paycheck.

There were times in the beginning my husband was working 2 jobs to get things right fortunately he is now able to just work his current job and that makes up the difference. I work but we have learned to live just on his salary to bank mine and created some breathing room for us. It was a big wake up call for us and a lesson to be learned, we love the simple life and not owing CC debt. We no longer live for the almighty credit score and are very happy renting our townhouse (we have a pool and tennis courts, did not have these things when we built our last house) and enjoy every vacation while we are on vacation because we know its paid for. Our life is about quality family time everyday not just on the occasional special day. It feels good!

[LadyInTheRed]

PhillyGuy, I share your discomfort when I see people who are in such a hurry to get credit cards after discharge. I understand the desire to rebuild credit, but some people go too far. There was a recent post where somebody couldn't understand why he couldn't get approved for more credit within a year after BK. This person had 2 credit cards with balances above 75% of available credit. It still wasn't a lot of debt because the credit limits were low. But, there was obviously a lack of undestanding of what helps and hurts your credit score.

Good luck on your 2014 goals!

[TheBajan]

Hi, I am not sure "most" people filed because of CC's alone BUT I do notice there is a fair amount of people that post about wanting CC immediately after filing or discharge. Our chp 7 was due to a mixed bag of events (job loss, debt, out of state rental home tenant moved out etc) which eventually put us where we felt the best business decision we could make for our future was chapter 7. Once we started talking about and researching bky we stopped paying the CC and mortgage on the rental (stayed current on our primary to do a stay and pay at the time) and went to a cash basis living standard. This was well over 2 yrs ago (filed Dec. 2011) and have stuck to that for living expenses and purchases. We save for what we want. We are now renters, did a short sale on our primary last year and have one car payment that we kept through the chp 7 proceedings. We live a simple life and save for everything. We are going on our second vacation since discharge and paid all cash for hotels etc. We have a savings/emergency acct and retirement accts (we had neither when things were paycheck to paycheck.

There were times in the beginning my husband was working 2 jobs to get things right fortunately he is now able to just work his current job and that makes up the difference. I work but we have learned to live just on his salary to bank mine and created some breathing room for us. It was a big wake up call for us and a lesson to be learned, we love the simple life and not owing CC debt. We no longer live for the almighty credit score and are very happy renting our townhouse (we have a pool and tennis courts, did not have these things when we built our last house) and enjoy every vacation while we are on vacation because we know its paid for. Our life is about quality family time everyday not just on the occasional special day. It feels good!

Very inspiring! I also am much more comfortable living on a cash basis. Saving for things instead of buying on credit and always paying in the rear with interest. It's such a breath of fresh air. I'm almost counting now to my discharge but not quite yet. Thanks for sharing this.

[pamkev]

I have 2 cards one gives me rewards points. If anything gets charged it gets paid the next day if not the same. I use mine for buying things on line they have very low limits which is fine with me. The one wanted to increase my limit and I said no thanks. We pay with cash but on line I don't feel comfortable using my debit card.

Pam

[ccmisery]

I filed due to two consecutive job losses within a year, which made me late on payments and then all went downhill from there, 6 months without a job on Florida unemployment, burned through savings and that was it. All CC debt, like my name states the misery I was in. I have no itching desire to go back into debt, I am amazed at the amount of people I saw and know who use CC's like they are going out of style, I know 20 somethings who live the fast life on CC's, have nice cars and etc. They are on the road to inevitable as well.

I did read and was told to get one card to rebuild credit, then I read the opposite. I tried two secured and one unsecured (probably too soon after discharge) and got rejected on all. I was anxious to repair my credit, but realized it was the wrong direction as CC's give you a false sense of financial freedom if your living paycheck to paycheck as it is. I only wanted a CC for two reasons, 1) to rebuild my credit and 2) to have it for travel for work, I know rely on Debit cards and have great success, just a bit of a pain since I have to get cash up front from my employer. I also signed up for a Target REDCard (Debit) which only works at Target and is automatically tied to your checking account, no problems getting that or Paypal Debit, the Target card is great because you get a 5% discount on purchases, which is basically nearly paying for the sales tax in my state.

For 2014, I plan to check my credit reports again, clean them up. I have had issues with all three correctly reporting an auto lease I have with Ford that was reaffirmed, which is in good standing since 2011 and should report as such. Maybe I'll attempt another CC as it's been over 6 months since discharge, or maybe not?

[AngelinaCat]

I also cringe when I see newly, or about-to-be-discharged debtors, climbing back on the 'debtmonster hamster wheel'. IMHO-they have learned absolutely NOTHING during the process.

Many times I, and others, have tried to counsel with these people, only to be castigated for our opinions. Oh well.... You know the story of leading the horse to the waters.....

Those people will eventually be back here, crying and whining as to why they are STILL in debt....

Look in the mirror, folks.....

[jacko]

What is so urgent to rebuild 'credit'?

I filed due to two consecutive job losses within a year, which made me late on payments and then all went downhill from there, 6 months without a job on Florida unemployment, burned through savings and that was it. All CC debt, like my name states the misery I was in. I have no itching desire to go back into debt, I am amazed at the amount of people I saw and know who use CC's like they are going out of style, I know 20 somethings who live the fast life on CC's, have nice cars and etc. They are on the road to inevitable as well.

I did read and was told to get one card to rebuild credit, then I read the opposite. I tried two secured and one unsecured (probably too soon after discharge) and got rejected on all. I was anxious to repair my credit, but realized it was the wrong direction as CC's give you a false sense of financial freedom if your living paycheck to paycheck as it is. I only wanted a CC for two reasons, 1) to rebuild my credit and 2) to have it for travel for work, I know rely on Debit cards and have great success, just a bit of a pain since I have to get cash up front from my employer. I also signed up for a Target REDCard (Debit) which only works at Target and is automatically tied to your checking account, no problems getting that or Paypal Debit, the Target card is great because you get a 5% discount on purchases, which is basically nearly paying for the sales tax in my state.

For 2014, I plan to check my credit reports again, clean them up. I have had issues with all three correctly reporting an auto lease I have with Ford that was reaffirmed, which is in good standing since 2011 and should report as such. Maybe I'll attempt another CC as it's been over 6 months since discharge, or maybe not?

[TXskyblue]

My BK was almost all credit card debt. Now < 6 months post-BK, I have two different local credit union cards, a NFCU card, two Capitol One cards, a Discover, and a Merrick. 7 credit cards.

I do not carry a balance on them and I don't use them much. The torture of having 80K in credit card debt was severe and I never, ever want to carry a credit card debt again.

I have built up several K in an emergency fund and am working on paying my mortgage off early.

I know it is kneejerk to cringe when you hear of someone post-BK seeking credit, but it doesn't have to mean what we fear it does.

[mynameainttracy]

I was recently denied a mortgage because I didn't have enough new credit references post bk 13 discharge. Getting 2 new credit cards was the only way for me to do that. So far I just try to put something on them and pay off the next month so that I can build a payment history to look more favorable to the bank and improve my credit score.

[PhillyGuy]

Very inspiring! I also am much more comfortable living on a cash basis. Saving for things instead of buying on credit and always paying in the rear with interest. It's such a breath of fresh air. I'm almost counting now to my discharge but not quite yet. Thanks for sharing this.

I agree. Cash is the way to go. I will only get one card and use it for small purchases I can pay in full or for an emergency's.

[grizindabox]

I do have multiple credit cards post BK, but I waited until almost 18 months after dismissal. We use 1 card for fuel purchases (cashback) only and pay it off every month. We have a small recurring monthly payment on a couple others that also get paid off monthly. We do use the cards for times when there is no other good option such as reservations and on-line purchases, but those are also paid off monthly. Obtaining new lines of credit is a necessary evil in today's world, but it is not credit cards that are bad, it is whether a person is disciplined enough to use them correctly...some people are and some people are not. We use a cash only approach for everything possible, and do not see a need for doing things any different.

[TheBajan]

I'm taking a more radical approach and just saying never again. I will not personally get another credit card, car loan, mortgage, or any other kind of debt that is within my control. I realize that the time may come when some medical emergency may create a medical debt. That is something I pray doesn't happen but if it ever does, I will have to deal with that as best I can. That is not something I can be in control of. We have someone here who is a recent example of that and it breaks my heart on her behalf. I am still keeping her in my prayers as I'm sure I will continue to do for quite some time.

This sort of debt I cannot control. I won't volunteer for it but if it comes, I will do what I can. Other than that, I choose to never again be a slave to a single payment of any kind.

[ccmisery]

What is so urgent to rebuild 'credit'?

Multiple reasons but mainly:

1) Housing situation
2) One of two cars is leased and going back this summer.
3) Potential new job search, took a big pay cut making less money then I was 6 years ago this year. Might mean moving and renting till we can buy a house.

[Blossoms]

My husband and I are in our second Chapter 7 bankruptcy, mainly due to involuntary job loss, and high medical expenses, not credit cards. We've gone through a combined total of 6 job layoffs, since 2006. I have been out of work off and on (not by choice - due to the bad job market here) since spring of 2011.

We do plan to try to rebuild our credit after our discharge, however. Not because we want a boatload of credit cards, but because we want to buy the house we are currently renting. We are in a two year lease, ending in August of 2015. Our landlords plan to put the house up for sale when our lease is up. They don't want to be landlords long term. We are the first renters they've had - they had tried unsuccessfully to sell the house before deciding to rent it out.

We love the house, the location, and the school district, and the mortgage would be affordable even just on my husband's income alone. Rents are high in the suburb we live in. We would save about $300 a month owning the house, vs. renting it, including mortgage, taxes, and insurance. My husband does building maintenance work for a living, and handled pretty much all of the maintenance on our last rental house, so he could handle any necessary repairs on this one.

We've been renting together for 19 years now, and have had enough. We don't want to spend the rest of our lives renting. One of my biggest regrets is not buying a house when I was younger - I'm 40 now, and my husband is almost 50. I feel like we're running out of time to become homeowners. Short of winning enough money in the lottery to buy this house for cash (ha!), our only option to become homeowners will be to rebuild our credit.

So yes, while for some people it makes sense not to try to rebuild credit after bankruptcy, or obtain any more credit, for others, it does make sense.