Question about credit score and charge-offs

[rooster6224]

Hello! I need some advice. I have really bad credit. Repoed car and several credit cards and the like. Every one of me creditors has charged me off. I would like to file BK. From my reading here on the forum I have found out that charge offs will remain in my report after BK. I understand that it should read as IIB but how will that affect my score and my ability to rebuild? How will creditors look at me when trying to rebuild with all of the charge offs?

My brother says to wait it out for the next seven years and it will drop off but I would like to buy a car and a house within the nex couple of years? Please advise. Thanks!

[jp2861]

Either way your credit is going to be in bad shape. You should try to forget about buying for a while, and deal with the immediate problem, which is how these debts will affect you now, and in the future. What your brother is failing to tell you is that these charge-offs can easily end up in the hands of a collection agency. Don't base your decision on the credit report. Charge-offs are still owed debts and can come back to you. All a charge-off says is that the bank wrote off the debt for their accounting and tax purposes. It doesn't mean you don't still owe the debt. These debts have a way of coming out of the wordwork years down the road. Even if you waited the time and the CO's fell off your report, you still owe them. If these debts end up in a CA's portfolio you're life will become miserable very quickly. If it were me, knowing that my credit will be dorked up either way, I'd want to do something that guaranteed the debt couldn't bite me in the butt in the future. You can file now, start rebuilding your credit, and know that the discharged debt is gone forever. Or, you can play the collections game, always wondering if one of these debts, or all of them, will come back to haunt you.

[rooster6224]

Does anybody know how lenders will look at "charge-offs IIB" and will affect the ability to rebuild vs. having a straight BK with no CO's?

[CindyLou]

I have a PERFECT example. I am working to clean up my reports still now 2 years after bk and have been fighting experian to dispute about 10 accts that were being reported as chargeoffs instead of IIB.

Well, they kept saying they were "frivilous disputes" and wouldn't dispute them. So I keep writing, every month! Well last month they FINALLY sent them through. They all came back IIB and my score increased by 80 points.

I am convinced that it is impossible to rebuild credit with just charged off accounts, because they will keep popping up. Once they charge them off it just means they sold them to a collection agency.

My scores tanked when I filed but then immediately started climbing. I'm now with all three in the 675-680 range. Almost all of my accounts were either charge offs from the original creditor or collection accts when I filed. I was a few years between stopping payments and filing.

[CindyLou]

Oh, on the car and house....I'm in the process of buying a house right now with an FHA loan. I was able to finance one car 2 months out of BK with Ford Motor and another about 8months out with Capital One.

I wasn't able to do anything prior to my BK. Life was much easier afterwards....

[rooster6224]

Thank you very much!