PWB
08-20-2003, 09:57 AM
Speaking as one who has gone through BK7 (Chapter 7 Bankruptcy), discharged
about 15 months ago...
My wife and I filed jointly, and received our Ch7 discharge just under 15
months ago. Since the discharge, we've acquired one auto loan, and three
unsecured credit cards (two in my name, one in the wife's name). We keep
the balances on the cards below 50% (usually zero, actually...) of their
credit limits. We've had picture-perfect payment history since BK. Hell,
prior to BK, our payment history had been perfect for almost four years...
until we filed, at which point we stopped paying all creditors except our
old auto loan (which we reaffirmed implicitly).
Having said that, our Equifax scores immediately post-BK were 525 (mine) and
540 (the wife's). This, plus perfect rental/mortgage and auto tradelines,
was sufficient to get an auto note underwritten by Americredit Finance
Company at 13.99% with no down required (we did have a trade-in, but it was
worth less than $2000).
Fast-forward to four months ago. I've been checking up on our credit
reports from all three CRAs (Equifax, Experian, TransUnion). Four months
ago, my scores were 574 (TransUnion), 584 (Experian), and 589 (Equifax). My
wife's scores were 525 (TransUnion), 575 (Equifax), and 579 (Experian).
Since I'm the primary breadwinner, this was sufficient to qualify us for a
subprime mortgage at somewhat punitive rates (8.75% for a 30yr fixed and
8.0% for a 3/1 or 2/1 ARM).
In the last four months, I've pulled our credit reports two more times, most
recently this week. I've sent off two sets of dispute letters -- six
letters in total -- disputing ONLY inaccurate entries in the credit reports.
This appears to have been quite effective.
Flash forward to today. My credit scores as of Monday were 614 (Experian),
622 (TransUnion), and 651 (Equifax). My wife's scores were 580
(TransUnion), 625 (Equifax), and 657 (Experian). This puts us in a MUCH
better position, rate-wise, for our impending home purchase. We qualify for
a rate in the 7.25-7.50% range for a 30yr fixed, and 6.5-6.75% for a 2/1 or
3/1 ARM.
The moral of this rambling story is that there IS life after bankruptcy --
pretty soon after bankruptcy, if you Do The Right Thing and don't repeat
your old mistakes.
PWB
"gsfmkcd" <gsfmkcd@yahoo.com> wrote in message
news:59b205cc.0308200710.71493841@posting.google.c om... What are PROS CONS of bankruptcy? 1. My home has already been foreclosed. We let the home go without filing bankruptcy because we were severely upside down equity wise. Even if we were able to keep it, it would have taken forever to pay off second mortgage back to positive equity. We couldnt even sell the house because we couldnt pay off second mortgage if we did. We let the house go, we are renting now. 2. The second mortgage received nothing from the foreclosure. I assume one day they will sue me for the $75,000 I owed them before the foreclosure. How does that work? 3. We have $60,000 credit card debt. Almost all of which has been charged-off by original creditor. We receive letters and phone calls from collection agencies. We throw the letters away and with caller-id do not answer their calls. 4. Our credit score is probably a 1. With the charge-offs and the foreclosure, I am assuming that my credit score could not possibly get worse by claiming bankruptcy. After reading many posts on this board I am led to believe that my score would actually be better if I filed for bankruptcy. Could this be true? Since the foreclosure we have gotten our finances straightened out. We are able to pay our rent payment since we do not have that huge second mortgage payment. Our car payments have been current for six months. We have not made a purchase on a credit card for two years. We live on cash only. We would like to rebuild our credit. Can a bankruptcy be used to help clean up a credit score? Thanks
about 15 months ago...
My wife and I filed jointly, and received our Ch7 discharge just under 15
months ago. Since the discharge, we've acquired one auto loan, and three
unsecured credit cards (two in my name, one in the wife's name). We keep
the balances on the cards below 50% (usually zero, actually...) of their
credit limits. We've had picture-perfect payment history since BK. Hell,
prior to BK, our payment history had been perfect for almost four years...
until we filed, at which point we stopped paying all creditors except our
old auto loan (which we reaffirmed implicitly).
Having said that, our Equifax scores immediately post-BK were 525 (mine) and
540 (the wife's). This, plus perfect rental/mortgage and auto tradelines,
was sufficient to get an auto note underwritten by Americredit Finance
Company at 13.99% with no down required (we did have a trade-in, but it was
worth less than $2000).
Fast-forward to four months ago. I've been checking up on our credit
reports from all three CRAs (Equifax, Experian, TransUnion). Four months
ago, my scores were 574 (TransUnion), 584 (Experian), and 589 (Equifax). My
wife's scores were 525 (TransUnion), 575 (Equifax), and 579 (Experian).
Since I'm the primary breadwinner, this was sufficient to qualify us for a
subprime mortgage at somewhat punitive rates (8.75% for a 30yr fixed and
8.0% for a 3/1 or 2/1 ARM).
In the last four months, I've pulled our credit reports two more times, most
recently this week. I've sent off two sets of dispute letters -- six
letters in total -- disputing ONLY inaccurate entries in the credit reports.
This appears to have been quite effective.
Flash forward to today. My credit scores as of Monday were 614 (Experian),
622 (TransUnion), and 651 (Equifax). My wife's scores were 580
(TransUnion), 625 (Equifax), and 657 (Experian). This puts us in a MUCH
better position, rate-wise, for our impending home purchase. We qualify for
a rate in the 7.25-7.50% range for a 30yr fixed, and 6.5-6.75% for a 2/1 or
3/1 ARM.
The moral of this rambling story is that there IS life after bankruptcy --
pretty soon after bankruptcy, if you Do The Right Thing and don't repeat
your old mistakes.
PWB
"gsfmkcd" <gsfmkcd@yahoo.com> wrote in message
news:59b205cc.0308200710.71493841@posting.google.c om... What are PROS CONS of bankruptcy? 1. My home has already been foreclosed. We let the home go without filing bankruptcy because we were severely upside down equity wise. Even if we were able to keep it, it would have taken forever to pay off second mortgage back to positive equity. We couldnt even sell the house because we couldnt pay off second mortgage if we did. We let the house go, we are renting now. 2. The second mortgage received nothing from the foreclosure. I assume one day they will sue me for the $75,000 I owed them before the foreclosure. How does that work? 3. We have $60,000 credit card debt. Almost all of which has been charged-off by original creditor. We receive letters and phone calls from collection agencies. We throw the letters away and with caller-id do not answer their calls. 4. Our credit score is probably a 1. With the charge-offs and the foreclosure, I am assuming that my credit score could not possibly get worse by claiming bankruptcy. After reading many posts on this board I am led to believe that my score would actually be better if I filed for bankruptcy. Could this be true? Since the foreclosure we have gotten our finances straightened out. We are able to pay our rent payment since we do not have that huge second mortgage payment. Our car payments have been current for six months. We have not made a purchase on a credit card for two years. We live on cash only. We would like to rebuild our credit. Can a bankruptcy be used to help clean up a credit score? Thanks
