One year done, 4 years to go

[JellyBeany]

Filed: 12/20/2019
341: 3/12/2020
Confirmation 3/20/2020 100% plan

Hi, everyone. This forum was a haven for me about a year and a half ago as I was preparing to file. I was scared, ashamed, frustrated, depressed, and anxious. I got lots of support, useful information, and good advice here. Hopefully someone reading will get some benefit from my story.

I live in California which is a community property state which means my husband's debts are included in the BK plan (kind of) but his name is not included in the filing, and the BK doesn't show on his credit score. His individual debts may show up on his credit report as being part of a BK but I haven't pulled his credit report so I don't know for sure.

NONE of his creditors submitted a proof of claim. When this happened, I thought we were off the hook and would not be required to repay those debts. Under the advice of our attorney, we were told that the creditors who owned those debts could pursue them once the BK was completed since my husband didn't officially file. Confusing, right? Anyway, we ended up choosing to file proofs of claim on behalf of my husband's creditors to avoid having them come after us once the BK was completed. It took several months to get this worked out. In the meantime, I made the monthly payments for the full amount of all our debts. Once all his proofs were filed (by us) and accepted by the Trustee, we were able to tally up the total proofs of claim. Several of my creditors also failed to file proofs of claim so we were able to be relieved of the obligation of paying them back. The monthly payment amount was adjusted downward by over $400/month which was very nice!

I've now made 13 payments, with 47 left to go. The 14th payment will be pulled either today or Monday -- I'm not sure what day it will be see the official draft day is supposed to be the 20th of each month, and the 20th is on a weekend this month.

We have been extremely fortunate over the last year. My husband is still employed and just got a raise. I was out of work for 3 months due to the pandemic but I was able to collect unemployment and we were able to keep up with the Trustee payments without difficulty.

One very interesting thing that happened was we were proactively approached by the bank that holds our mortgage (Wells Fargo) about forbearance. Because we are current with mortgage payments we were eligible to completely stop making mortgage payments for 7 months. Those 7 months' worth of payment are being tacked to the back end of our loan with no added interest. Should we sell the house or refinance we will be required to repay that amount but otherwise we essentially got a mortgage payment holiday for 7 months. This was HUGELY helpful -- we were actually able to save up several thousand dollars as an emergency cash cushion and this makes me feel so much safer. The reason we were able to take advantage of this program was because my husband's name is not on the BK, and his is the only name on the mortgage loan. If he had filed BK with me, we would not have been eligible for this plan, so again I am very appreciative and thankful for this.

I have started keeping track of money a lot better than I ever did before. One thing I do is keep track of the money in my IRAs on a daily basis. Lately I started keeping track of the difference between my retirement savings compared to the amount still owed to the Trustee. Within a month or two, this metric will likely be in the positive numbers which thrills me more than I can say! At least on paper, I won't be in the negative! This feels amazing and so freeing.

When we were in the middle of getting ready to file I couldn't imagine feeling to lighthearted and free about money. This past year hasn't been easy but it has been a tremendous learning experience and I am grateful for it.

Looking back, the only thing I would do differently is to file MUCH, MUCH sooner. I wish I had filed for BK several years before we did, instead of spending those years with a chronic knot of worry in my stomach.

[JellyBeany]

Oh, I meant to include this in my post: In the "good days" my credit score was typically very high - around 800. Just recently I signed up with Credit Karma and another credit app because I was curious about my current credit score. Credit Karma says my score is 608 and the other one (I can't remember the name of it right now) says it's 592. So, I supposed it's around 600-ish. Now, I'm not in the market for a credit card or a loan so it doesn't really matter what my score is, but I was surprised because I thought it would be much lower. This gives me hope that when it's all paid and discharged, I may actually be eligible for a credit card again -- not that I would use it much! I've DEFINITELY learned my lesson!

[shipo]

Congratulations on your first complete year; only four(ish) to go.

[shipo]

Oh, I meant to include this in my post: In the "good days" my credit score was typically very high - around 800. Just recently I signed up with Credit Karma and another credit app because I was curious about my current credit score. Credit Karma says my score is 608 and the other one (I can't remember the name of it right now) says it's 592. So, I supposed it's around 600-ish. Now, I'm not in the market for a credit card or a loan so it doesn't really matter what my score is, but I was surprised because I thought it would be much lower. This gives me hope that when it's all paid and discharged, I may actually be eligible for a credit card again -- not that I would use it much! I've DEFINITELY learned my lesson!

A few comments which may, or may not be useful to you:

• My Chapter 13 was Discharged last March and when I first checked, my two VantageScore 3.0 scores available via CreditKarma were something like 705 for TransUnion and 720 for Equifax; my Experian score, which is Based upon the FICOScore8 model was around 610. Here I am 11 months later and the first two have both dropped about 15 points, probably due to the number of "hard" pulls against my credit, and the latter has increased about 35 points; go figure.
• Fresh out of a Chapter 13 as I was then and as you will be in a few years, don't count on being able to get an unsecured credit card right away, at least not one with little or no annual and/or monthly fees.
• With that last point in mind, a month or so out, you will most likely be able to qualify for a Secured Credit Card, however, not all secured cards are created equal. If a card with a limit of $1,000 or less works for your needs, then CapitalOne seems to be the odds on favorite, however, if you want/need a higher limit, say because you rent a car from time to time, then you'll need to look further afield.
• I made the mistake of following the path of least resistance and applied for the CapOne card, only to realize the low limit was insufficient for my monthly needs and closed it after less than two months. After doing some more research I found Bank of America and TDBank both offered secured cards with limits up to $5,000, interest on the security deposit, and at least in the case of the TDBank card, cash back rewards. Then there is Wells Fargo which offers a secured card with a $10,000 limit.
• The cool thing about a secured card is, after roughly six months of a stellar payment history, most of the secured cards will be converted to unsecured and your deposit either "unlocked" or applied as a credit to your card. The other cool thing is, once you start showing a few months of excellent payment history on your credit reports, offers for unsecured cards with good terms start coming your way.
• Like I wrote above, I am less than a year out from my Discharge, and have had one secured card "unsecured", and have obtained a second unsecured card, both offering cash-back rewards with no monthly or annual fees.
• The thing about using credit is, you need to do so to be able to use more; say to get advantageous interest rates on a new(er) car and/or a new home. Will you *need* credit once your Chapter 13 is over? Maybe not, I know for the time being I don't, however, I may very well want to show a good credit rating when the specter of a new home or car looms on my horizon.

Good luck on your journey and let us know how you're doing from time to time.

[Carmella]

Congrats 1 year down!!! Sounds like it is going very well and that you could take advantage of the mortgage holiday and set money aside. That is what we lack any type of emergency cash. We are living basically paycheck to paycheck at this point. I agree that the thing we would do differently is file sooner rather than later. Keep up the great work!

[Barbisi]

Congratulations on making it through a difficult and challenging adjustment - your first year of BK13, JellyBeany!
I can only hope our final year is as smooth and stress-free as your first 12 months were ! LOL
May Murphy and all bad tidings avoid you until 2025 and beyond -best of luck!