Another winner - DISCHARGED!

[newlife13]

The Bankruptcy Court issued my discharge this morning! My attorney emailed me a copy of the discharge order and the hard copy is in the mail.

I'm so happy to join those of you who have successfully completed a Chapter 13! I just quietly made my payment every month and kept my head down. My payment was very low because I only didn't meet the means test on a technicality (ex-husband claimed 1 of the 2 children on taxes, so my household was *technically* two but really three), so it was not a hardship for me. And, from an emotional perspective, it felt good to pay at least some of my debt back to creditors.

Thanks for the support over the years. In the beginning, I was counting every month and calculating what percentage complete I was. The months seemed to creep by. But, then, all of a sudden, I was done! So, those of you just starting out, hang in there, make your payments, keep your head down and you will get that discharge!

[shipo]

Congratulations! What are your plans for rebuilding credit, if any?

[newlife13]

Congratulations! What are your plans for rebuilding credit, if any?

If I'm being honest, I had to get a Secured credit card for travel and car rentals, so I already have some credit, but I didn't keep any revolving balance. Paid in full before the account cycled and statemented. This is good for someone who is not supposed to have any revolving credit but not good for increasing credit scores.

I dumped the secured card with the annual fee a while back, so my plan now is to use unsecured credit cards for some regular, recurring expenses (<10% utilization), let the accounts cycle & statement, then pay in full. My middle credit score is 676, so I expect to be up into the low 700s shortly after discharge and certainly after the BK drops off my credit report in 2 years.

I may need to buy a new-to-me car soon. My car is a 2010 with $140K miles. But it's a HONDA! Hopefully, in 1-2 years after the used car market stops being insane. A small car loan should also help my credit recover.

[shipo]

If I'm being honest, I had to get a Secured credit card for travel and car rentals, so I already have some credit, but I didn't keep any revolving balance. Paid in full before the account cycled and statemented. This is good for someone who is not supposed to have any revolving credit but not good for increasing credit scores.

I dumped the secured card with the annual fee a while back, so my plan now is to use unsecured credit cards for some regular, recurring expenses (<10% utilization), let the accounts cycle & statement, then pay in full. My middle credit score is 676, so I expect to be up into the low 700s shortly after discharge and certainly after the BK drops off my credit report in 2 years.

I may need to buy a new-to-me car soon. My car is a 2010 with $140K miles. But it's a HONDA! Hopefully, in 1-2 years after the used car market stops being insane. A small car loan should also help my credit recover.

I was nearly a year post discharge before my secured card graduated to unsecured, quite honestly, having a secured card doesn't hold your scores back at all as FICO make zero distinction between secured and unsecured; all it sees is you have a credit card with $x.xx limit and it is in good standing. During the months when I only had a single secured card my scores went up over 50 points.

I ended up keeping my secured card, getting an unsecured card from CapOne, and then a second unsecured card from PenFed (by which time my secured card had graduated to unsecured). From the point where I got my third card through today, my Chapter 13 has dropped off my credit reports and my scores skyrocketed from the mid to high 600s to the low to mid 800s!

Regarding cars, well, I'm currently in the Honda camp as well, I started my Chapter 13 back in 2015 with a (then) 14 year old Honda Accord, and when it rusted away to nothing during my 4th year I bought a slightly newer 2006 Acura TL (basically a Honda Accord all gussied up), and now, five years later, I'm still driving the TL (although I did put money down on a new vehicle a few weeks ago, but one which I don't expect to see for at least 8 months).

Long story short, keep your cards paid off, let your discharge age for at least six months (but as you wrote, 1 to 2 years will be better), and then you should be able to get a pretty good rate on a car loan (if you really need it). In the meantime, I cannot recommend joining the PenFed credit union strongly enough, I have yet to see any lending institution offer consistently lower rates for cars, both new and used.

[newlife13]

I was nearly a year post discharge before my secured card graduated to unsecured, quite honestly, having a secured card doesn't hold your scores back at all as FICO make zero distinction between secured and unsecured; all it sees is you have a credit card with $x.xx limit and it is in good standing. During the months when I only had a single secured card my scores went up over 50 points.

My secured card had an annual fee and I no longer needed it because I got an unsecured with no annual fee. (My attorney knew and just said not to keep a balance, at all.)

I ended up keeping my secured card, getting an unsecured card from CapOne, and then a second unsecured card from PenFed (by which time my secured card had graduated to unsecured). From the point where I got my third card through today, my Chapter 13 has dropped off my credit reports and my scores skyrocketed from the mid to high 600s to the low to mid 800s!

Nice! I burned Capital One in my bankruptcy... for a lot of money. So I doubt they will me back in soon, if ever.

Regarding cars, well, I'm currently in the Honda camp as well, I started my Chapter 13 back in 2015 with a (then) 14 year old Honda Accord, and when it rusted away to nothing during my 4th year I bought a slightly newer 2006 Acura TL (basically a Honda Accord all gussied up), and now, five years later, I'm still driving the TL (although I did put money down on a new vehicle a few weeks ago, but one which I don't expect to see for at least 8 months).

I'm going to drive my Honda into the ground. But I want to be ready if/when that happens. Hopefully not for another two years.

Long story short, keep your cards paid off, let your discharge age for at least six months (but as you wrote, 1 to 2 years will be better), and then you should be able to get a pretty good rate on a car loan (if you really need it). In the meantime, I cannot recommend joining the PenFed credit union strongly enough, I have yet to see any lending institution offer consistently lower rates for cars, both new and used.

I joined PenFed! I have an unsecured card with $5K limit ($0.00 balance), specifically with an eye towards getting a car loan in the future. My credit union is fabulous but very rigid about BK. Will not even manually underwrite a loan until 2+ years after discharge. No exceptions.

[shipo]

Nice! I burned Capital One in my bankruptcy... for a lot of money. So I doubt they will me back in soon, if ever.

CapitalOne is widely regarded as one of the most forgiving, if not the most forgiving issuer of credit cards out there; odds on bet if you let your discharge age a month or two, they'll welcome you back with a Quicksilver card (which features a 1.5% cash back reward) with a $3,000 limit.

[Zombie13]

Congratulations newlife13 !!!