5 things you can do after bankruptcy

[daniel]

Hello everyone...I hope my post will be helpful...I will be waiting for replies .. thank you.

One of the issues that people considering bankruptcy often worry about is that they will never get credit after filing a Chapter 7 or Chapter 13. That, or the fact that the bankruptcy will stay in their credit report for 10 years from the filing, which fact would serve as warning to future creditors that you might turn out to be a bad risk.

1. Keep a Credit Card out of the Bankruptcy:- When filing for bankruptcy, the rule is that you have to make a schedule. A schedule is a list of all assets and liabilities that you are required under the law to disclose before
a bankruptcy case could commence.

2. Get New Credit after Bankruptcy:- If there is one thing you can count on in today's competitive lending environment, it is that credit is always available, even to the recently bankrupt.

3. Buy a House after Bankruptcy:- Absolutely. Actually, there are many studies that show bankruptcy debtors can qualify for a home loan on the same terms as if they had not filed bankruptcy within 18 to 24 months after a bankruptcy discharge.

4. Get New Wheels after Bankruptcy:-A common misconception people have after a bankruptcy is that getting new credit like a car loan is virtually not possible. Well, note that the word used is "virtually." That is not the same as saying that you are certainly never going to qualify for a new car loan. Because the truth is you can and you should, if you need to.

5. Have a 700+ Credit Score Two Years after Discharge:- You might find this statement suspect, which is understandable really when you consider the many stories of how one bankruptcy can thoroughly damage the credit rating you've been building up for years. Expert after expert has said that new credit is near impossible to get after filing for a bankruptcy.

5 things you can do after bankruptcy.

Dan.

[Dan, I deleted your signature because the link to the Finance Guide 101 you posted above in this reply and in your signature aren't working. Both get a "Cannot find server" error message. -lrprn)

[Bandit]

Awesome. This lets people know there is still hope. I never would have thought you could buy a home within 2 years after a BK. Yet I just learned that my aunt & uncle bought a home two years after they filed. A nice home.

I was reading somewhere that some banks actually see people with fewer bills (after a bankruptcy) less of a risk than those who may have great credit but with many outstanding bills. It does make sense that getting a home immediately after filing is a wise decision.
Maybe I will own my own small home someday after all.

1. Keep a Credit Card out of the Bankruptcy:- When filing for bankruptcy, the rule is that you have to make a schedule. A schedule is a list of all assets and liabilities that you are required under the law to disclose before
a bankruptcy case could commence.

This one is a little confusing though. How do you keep a card out of BK, if the decision to allow you credit after is ultimately up to the Bank?

[HHM]

I wrote a response to this last night, but before I could post it, the forum went down for maintenance. In any event...

#1 is confusing. If all you mean is that you can have a credit card after BK, sure, that is true. But as Bandit has pointed out, it is up to the lender to decide whether to keep open an account you included in the BK and you have to list ALL accounts that have "a balance". In your BK petition, you can leave off credit cards with a zero balance, and odds are the lender will keep the card open through, and after your BK. But, the lender, always has the option to close the account, and most will close the account when they do their routine, promotional auditing, of your credit report and discover the BK.

#5...It is "possible" to have a 700+ score two years after BK, but that only happens in limited circumstances and mainly depends on what your credit looked like before you filed BK. If a debtor had a 700+ plus score when they filed BK, then they probably have a better than 50/50 chance that, with proper credit reporting, good credit habits post BK, and different classes of accounts (i.e. credit card, car loan, and mortgage) that they could have a 700+ score in 2 years. However, for most debtors in BK, they have done sooo much damage to their credit before filing BK, that it will take them many years to get a score of 700+. So, it is possible, but getting a 700+ 2 years after BK is more the exception rather than the rule.

[CPO]

Ok, maybe I'm just a dufus or something but after reading for the last year or so about all the scams, collusion, mafia tactics and downright ugly, immoral credit traps that the major banks and credit "vendors" have perpetrated on the undisciplined, lazy, ignorant, petulant "I have to have it right now" american consumer (and yes, that includes me too) I'm not so sure that running out and recreating the very monster that drove so many of us here in the first place is such a good idea.

Why?

Think about this:

If you had $10-15K in the bank...I mean in your money market account where you could easily access it, why would you need 10K in credit card debt?

Tell me that without debt you could not save that amount of CASH in the same time it would take you to "repair" your credit and head right back into the same situation that brought you here in the first place...IN DEBT.

And, hey...you keep earning, and you keep saving. Imagine that. Your own money....

I can see (1), that's ONE, that's ONE ONLY credit card with a credit line of no more than $2K (and that's probably too much anyway) for those EMERGENCIES when you must, for protection only...or perhaps car/hotel rentals, compel you to use somebody else's money with scam strings attached all over it and the overt possibility of being screwed to go along....

Let me be graphic about this (if your easily offended, please skip this part)...

YOU DON"T NEED ALL THAT NEW SHIT IN YOUR HOUSE THAT THE TELEVISION TELLS YOU YOU NEED. STOP BUYING ALL THAT SHIT. PEOPLE ARE LAUGHING AT YOU ALL THE WAY TO THE BANK WITH FISTFULLS OF YOUR MONEY. STOP IT. YOUR NOT SPECIAL WITH TODAY'S NEWEST SHIT IN YOUR HOUSE 'CAUSE I SEE IT AND I KNOW YOU CAN'T AFFORD IT!! YOUR SECRET IS OUT. NEW SHIT WILL BE OUT TOMORROW....YOU GONNA CHARGE THAT TOO, STUPID?

Being $20k in consumer debt and owing $200k on your house is not sexy, cute or cool.

It's like going through life stupid, fat and drunk (I stole that). People laugh with you when your looking but laugh at you when your not around.

I didn't save. I screwed myself big time. I was an eager consumer too, and I got in way over my head because I was ignorant and undisciplined. Shame on me. And I bear complete responsibility for my disaster and I'm gonna pay big time for it. I lost my job, and my little house of cards crumpled like drying sand. People lose jobs everyday...how could I have been so dumb?

But, I'm going to learn from my mistake. Credit is evil, nasty stuff and you are not going to win that game. If you play, consider yourself already burnt. If you have been here before, you get no reprieve from me.

I like to think that if we start taking care of ourselves and managing our money properly we can live good, healthy conservative money lives on the money we earn and put much of this bad debt stuff behind us.

Otherwise, this debt monster is gonna eat you alive and leave you with less than you have today. That's a fact. Get used to it.

Repair my credit? Yea, right. That's my last priority.

CPO

[JRScott]

While I do believe the OP may have just wanted to give us all hope, and it is necessary to reestablish some credit in order to buy a home at some future date, I think we have to largely reexamine our lives as CPO suggests.

At Church there is a fella that has a plan called the 10 80 10 plan. 10% tithing, 80% to live on, 10% saving. I'm gonna try to work on this plan as I come out of bankruptcy .

[CPO]

Thank you JRScott,

Just to be clear, my intent with the above post was not to step on the OP.

I sincerely hope that it was not taken that way.

I just wish that each one of us slowly, methodically and oh so carefully, examines their financial futures and decides that debt is, to a major extent, a bad thing.

Most of us here got here, at least in part, by a heavy debt load. Very bad things have happened to us in the mean time.

Many (if not most) of those that extended this credit to us actively employ tactics specifically designed to entrap consumers into paying for creditors' riches. FACT.

Hey, I'm a career military man, a combat veteran and I was ambushed when I should have surely known better. I have no one to blame but myself.

My post is just a "raising of the flag," a warning....

The same traps and emotional incentives that were out there years past that we all bit into are still there, if not larger and easier.

Be very carefull about jumping back into the fire.

Believe me, I never thought of myself as a slave...until I looked up the term "indentured servant" and realized I had been had...

Repair what you must, and remember that time and self sufficiency are the best medicine.

Now we know what will happen, and that is "you will get burned."

Let's not do that again.

Best Regards.

CPO

[Granny]

Well said CPO.

Not only was I a slave to the credit card companies, now I am a slave to all the stuff I have accumulated over the last 30 years. I look around my house and it's filled with stuff. I have two 2-car garages filled with stuff and my cars sit out in the rain.

I am a slave to this stuff. It has to be cleaned, washed, dusted, shined, and protected from the elements. I can't bear to part with any of it because of the emotional attachment I now have to this stuff. Can't part with it because I'm in no position to replace it if the need arose and I didn't have it.

I cleaned the kitchen cabinets the other day and found my stand up mixer, actually I found 2, one was my mom's. I attempted to use mine yesterday, and the motor was shot, it wouldn't turn off. It was working the last time I used it, which was years ago. It deteriorated sitting in the cabinet. This has motivated me to look around and see what else I'm keeping that has not been used and should be disposed of. But it's going to be a long slow process, but once I am finished, I think I will finally feel the freedom that I have been searching for. I sure hope so.

[freshstart06]

This is what I know for a fact. I am a Mortgage Broker, the only reason I am not working now is due to illness but my focus was B/C lending. They have programs right now for Mortgage loans one day after discharge. Yes, this is true anyone that wants proof, I can fax you a few flyers (information only) I did a loan last year, the lady had a foreclosure and a bankruptcy that discharge a month prior and she was able to get 100% financing, her mid score was 620 and yes, this program is still available as long as your scores are 620 plus and you are not going stated. But regardless, now they have no credit check loans, you will need to put down at least 25% (which is hard for most of us now) but this program is available. They do not care what your score is because they don't check.

Another guy, an investor, I started doing loans for him in 2005 he had a bankruptcy and a score of 525 to start, 1 1/2 years later this guy had a 735 mid score, A++ credit and 12 houses. When I did loans for him at that point lenders never asked about the BK.

Yes, good credit and credit cards are possible, I seen it myself.

[CityGirl]

Thank you OP and CPO ..excellent posts.

As far as buying a home goes. My friend did it 2 years after bankruptcy. In fact, she got a 6% interest rate FHA loan and built her home....
it's possible but getting back in the credit trap is something I won't ever do again!!!
I'm going to put all my hard earned money in a bank account, use my debit card and I have a few cards that have zero balances that I'm keeping out of BK and charging $20 and paying it ...etc...to rebuild. I'm keeping them on because of the length of the tradelines, which helps raise your score. If you have any low balances that you can pay off before BK and keep them, DO IT! It will help you......
Just make the CC company lower your limit to $300 or so and tell them you don't ever want it raised...then you can charge and pay off..and rebuild it again.

[keepmine]

Filing bk is the easy part. 99% of the time, it's done in 90-120 days.
What comes next is hard. That's fixing the things that led to the bk. Bk is worthless if you can't support yourself going forward. I'm just stunned at posts I see here and other sites where people making $1200-$1500/month want to know if they can get credit post bk. Folks-with that sort of income you don't need credit.
Travel emergencies, auto repairs,etc.-that's why you save money so you can pay for the unexpected.
First thing I did post bk was get a better paying job. A few months later, I got a py job working overnight 2 nights a week. I'm gonna take some vacation from my real job this fall and try and work some 3 and 4 nights at my pt as the store gets ready for the holiday season.
Credit repair has it's place but, I'd recommend it as a backburner issue for a couple of years until you soldify your financial base. Make more money, save some money, max out your retirement accounts, make sure you have both log and shortterm disability policies. Life insurance if necessary and be sure your auto coverage conforms to state law.
A lot of things to be done that are more important than credit.

[leftyf]

I second and third granny here...I've spent literally months trying to get rid of crap. Moving a lot, which I have done helps, but I still seem to have so much junk taking up space. The sad part is I'm sure I have given away things that I haven't even paid for yet and will be part of my ch 13. Just plain dumb.

[DeadManCrawling]

CPO is correct in every instance, and I feel compelled to add my 2 cents.

I have not posted for a while, but have continued reading and researching different aspects of credit laws and calculations. Everything below has been researched legitimately in some fashion or another, mostly from links I have previously posted. If you want the links, run a search on my posts. Also there are many resources available through bookstores and libraries.

Credit is not only nasty, it is completely without a soul. Don't think for a second that the person on the line suggesting "they can work with you" gives a rat's behind about you, your family, your history or your problems.

We truly ARE the little people to this machine.

In fact, the people on the phone are TOO.

Brief fact: The credit companies know almost more about us than we do. They have computer programs that track thousands of variables on each of us, using easily obtained information, to creat virtual models that can predict 98% of the time your next move, financially. FICO recently purchased the largest "computer modeling company" in the world to further analyze us.

They can also predict, with almost as high a degree of accuracy, the "stimulus" you will respond to.

That is, if you are an inner-city African American in an established affluent neighborhood, at some point you will receive a call from someone who sounds like "they can relate to you."

If you are a midwestern cattle rancher, ditto. The man or woman on the phone will sound like he's your neighbor two farms over.

This doesn't happen right away (and sometimes not at all, depending on the debt load).

Here's my example from my own life.

I grew up in the midwest, began a very successful business, made more money than is good for any one person in their 20's, got used to a certain style of living, and never saved. I imagined the ride would never end.

It did. I made a disastrous business mistake and am paying for it.

Was late by one DAY on one card. The following month that card went from 8% to 33%. The next month, ALL of my debt followed.

Fast forward a few months, and we are waiting to file, probably by the end of the week.

We have not answered our phone, but here's a sample of the messages left:

Voice #1. Sounds like John Wayne. It is "Frank McGovern" (original, huh?). Frank is an honest sounding and very confident voice, who explains very firmly that he has been practicing business for 35 years and understands the "old style" of banking. He elaborates, adding that the company would be happy to sit down with me (via phone) and hammer out some details on a new agreement to "take care" of the business issue I am having.

Sounds good, right?

Not so fast, Fluffy. Frank McGovern is an employee of one of the major credit companies. Won't say which specifically, but think of MBNA, Chase, CITI, etc.

I know a few things about vocal projection and inflection. I am a performer in an area very close to all of that.

Here's the real truth about Frank. Frank likely DID come from the midwest, but that's where our stories diverge. Frank is, in all likelihood, a "hired gun", last-chance solution for a company like this. After all the letters have failed, and no one has answered, if they can get Frank on the phone with me, live, in person, he's got a good shot and getting some sort of money out of me.

Their best hope would be to "work out that new agreement" mentioned above. That new agreement would likely have hidden in it somewhere, language that amounts to a default judgement, or secured the debt owed by some of my assets which have no debt.

Frank is probably getting a small percentage of this "high dollar" debt that he actually collects on, and is probably very effective at his job. But it IS a job. That's not really John Wayne on the other end of the phone (though it sure sounded like him, without the weird accent). And it certainly isn't someone concerned with MY problems (or yours).

Main thing is this: Somewhere, a program analyzing my finances, decided to get "Frank McGovern" on the case. If I were a stay at home mom in white suburbia, it might have been "Belinda Michaels". If I were a Latino from San Diego, it could have been "Maria Sanchez."

This is not paranoia, please don't think that. It is good business sense, on the part of the companies concerned, and only seems to apply to very high dollar debt.

The messages evolved over time, and have not been the same. Now, as I type, there are a few calls from the company, and even the female voices sound like gender-bent versions of Frank.

A month ago:

Frank on the phone again. This time, frank is "concerned about my well-being". He goes on to say that, though the company hasn't received any payments, their primary concern is my safety and that of my family. Since I haven't contacted them in months, this massive publicly traded company wanted to make sure I hadn't been injured or hospitalized.

Thoughtful, arent they? It made me warm and fuzzy all over, to know that they care so much.

Then Frank calls back THE VERY NEXT DAY. Oh, Frank is P#!SSED. He snarls his way through his new angle, barely taking a breath: Listen, PAL, you can't RUN from your problems FOREVER! I also grew up in the MIDWEST, and LET ME TELL YOU, my family had good, solid VALUES, and by LORD, WE PAID OUR BILLS.

And so forth. It was about a 2 minute long message. I saved it, in the event it ever somes in handy.

A few days later, we receive a letter from the company. This is a business debt, guaranteed personally. We have not spoken to the company in eight months, and never about the subject it addresses:

Dear_______, We are writing because in a recent conversation, you indicated that all of your debt was for your business, and that you were not personally responsible. This is not true. You are, indeed, responsible. . .

THAT conversation never happened. Why the letter? No idea. Maybe trying to imply the conversation did happen, for later use in court. Maybe the company made a mistake on the mailing.

Flash forward to another call from Frank. He is very persistent, and leaves me messages all the time. He is the sort of man you would never want your daughter to marry.

The last call from Franka couple days ago: Mr__________, This is Frank McGovern, from________ Bank. I wanted to touch base and let you know that I've been practicing business for 35 years and understand the "old style" of banking. I wanted to elt you know that ___________ Bank understands that problems and unforeseen events can happen in business. I'd like very much to have you give us a call back. We'd like to work with you, since you're such a good customer, to adjust the terms of your agreement or, perhaps, forge a new agreement, that benefits your business and takes care of this issue. My number is ____________. Again, it's Frank McGovern, and I look forward to speking with you.

If all this sounds long and rambling, my apologies. The point of this post, really, is the FIRST and LAST messages this fellow left. I don't know if they ran out of scripts, or what happened, but very strange evolution of calls.

If this were a real-life lover leaving the messages, I could have him or her jailed.

Alas, Frank and I were not meant to be, and he will never know the pleasure of speaking with me on the phone.

We hope to be filed this week, and then Frank will be able to make his calls of compassion to one more person, who hopefully, will have read this and will know a little more about Frank than Frank suspects.

Best wishes,

-dmc

[$$only4ever]

I am currently in a chapter 13; 26 payments paid; 34 more to go. I can definitely tell you what I will not do after I am discharged. I will not get another credit card. I think all of us can agree that running up debt on those "little plastic wonders" got us into this mess to begin with. I will have money saved for those emergencies. If there is anything positive about being in a Chapter 13, it has been learning to budget your money and paying cash as you go. The best part of paying cash is that you never receive a bill in 30 days. I like that.