18 Months After Discharge

beezer32 · ‎12-07-2016

I just wanted to share with you folks where I'm at financially now, especially those who are considering CH7. I first will say that unlike some people report, I have to say that my decision to file wasn't hard at all. I knew that I was at the end of the line. The event horizon. The point of no return. So, while I admit that the process is stressfull at times and that it is an emotional experience, when you are at rock bottom it's well worth the leap. It's your right under the United States Bankruptcy code and do not be afraid to use it if needed.

Now, onto my progress..

At filing, my all three scores plumted to 480-505 range. They weren't much higher to be honest pre-petitioning. The scores remained the same throughout the process (Meeting of Creditors, counciling etc..). Upon discharge, I immediately cleaned up my reports with all three CRB's. Take the time to do this! Send certififed mail if you have to. It's worth the foot work to get it right. All accounts included in your BK should read IIB and have a zero balance. Over three months, my scores rose 30-40 points and I have no idea why.

16 days after DC, I was approved for a $14k auto loan with a terrible interest rate (23.99%). Still, I took it. Credit was credit and I needed a ride since I did not reaffirm my auto that was IIB.

For my rebuild from a card standpoint, I was approved for a Firestone credit card at about 4.5 months post discharge. I had a 579 FAKO and CFNA granted my a $900 limit. I was pumped! This was my first card after DC. Used it sparingly keeping the UTI under 9%. Next, I applied for and was approved for TWO Capital One cards at 6 months post DC. Mind you, I had even IIB Capital One in my Ch7. I burned them on a $14k auto loan and a small unsecured card balance ($500+-). They STILL let me in. I was approved on both the Platnium an the QS1 both in the same 15 minute period, although I hear they don't do double approvals anymore (?). Each card was for $500 and both were auto into the credit steps program.

Next, at 8 months post DC, I picked up Comenity Bank's PayPal and Maurices cards. Both with $300 limits. I wasn't picky. Credit is credit after BK! At 10 months, I was approved for 2 Synchrony cards (WalMart $750 and Amazon Store $800). My FICO8 EX at the time was 612. Then at 12 months post DC, I got in with BarclayCardUS and received a Mastercard Rewards card through them for $750. Beyond that, I app'd for a few more cards at 12 months post DC (Overstock $750, Sony Card $1000 and finally Victoria's Secret $250 (for the DW). From 12 months post DC until now (18MO post DC) I have been in the garden.

All of those cards above have grown decently over the past year of so (respectively). All except for the Synchrony cards (Amazon and Walmart). They have not auto CLI one penny yet and all 'luv' button CLI requests are denied. And I'll tell you why in the next paragraph..

The bad stuff:

At 18 Months post DC, I found myself over utilized on my revolving accounts. I 'have' $11.5K in total credit limits but carry a $6K balance over them. My wife and I realized that we were quickly going back into the same shape the got into the BK position to begin with. So be forewarned, it can happen. Please be disciplined about new credit after your BK is discharged. It's soooooo important to control your UTI and make payments on time. Now, we have never had a payment even go a seond late but like I said, UTI was bad (51% aggregate). Some individual UTI percentages on cards were over 70% or more (but less that 80%). Bad stuff! I did manage to keep some accounts below 9% and some with a PIF zero balance each month, which helped the overall UTI aggregate.

Anyhow, to close, we recognized the need to reverse course. So at 18 months post DC and accumilating debt, we decided to app for a personal loan for debt considation on the cards. Note: My scores currently 18 months post DC are: 612TU, 627EQ and 644EX. With those scores I was denied at all of the usual places (Lending Tree, Prosper etc..) but was ultimately approved at Best Egg! They gave me an approval today for $6000/5YR/18%. High I know % but the entire $6K is going toward credit card reduction. Well worth it, as most of our cards have a higher APR than that of the Best Egg loan. Plus we will immediately see a significant decrease in revolving debt, thus boosting our scores. The effect of the loan itself will have no to little impact on my score.

The moral here is that there is a credit life after filing bankruptcy. We went from being $90K+ in the hole before BK, to at least having a rebuilding credit file after 18 months. There are different methods to get you built back up but this has been my experience thus far. I'll reupdate this thread after I see what kind of an impact this card consolidation action has! YMMV but good luck to anyone contemplating BK. =)

iheartwings · ‎12-08-2016

@beezer32 wrote:

The bad stuff:

At 18 Months post DC, I found myself over utilized on my revolving accounts. I 'have' $11.5K in total credit limits but carry a $6K balance over them. My wife and I realized that we were quickly going back into the same shape the got into the BK position to begin with. So be forewarned, it can happen. Please be disciplined about new credit after your BK is discharged. It's soooooo important to control your UTI and make payments on time. Now, we have never had a payment even go a seond late but like I said, UTI was bad (51% aggregate). Some individual UTI percentages on cards were over 70% or more (but less that 80%). Bad stuff! I did manage to keep some accounts below 9% and some with a PIF zero balance each month, which helped the overall UTI aggregate.

=)

Congrats on your rebuilding, and I cannot emphasize this particular sentiment enough.

I took on debt after my BK in the form of CC. Don't get me wrong, I was very diligent about paying on time and more than the minimum. But, I accumulated debt and started carrying balances.

It wasn't until year two after my BK7 that I took the bull by the horns and got my act in gear. I made a budget. It was quite rudimentary, but it fit my needs, and I paid my fixed expenses (except for rent, which I could only pay once a month) every other week when I got paid. Eventually, I was able to do a little extra work to pay off my cards in a chunk, and ever since then, I've become quite the CC transactor. But, it required me having to change my frame of mind. Instead of having the CC essentially float me a loan for a month (thus maximizing the grace period), I had to start thinking about it as my CC being a "pass-through" for my spending (so I didn't have to directly use my debit card). Now, my only outstanding debt is a hefty student loan which I also pay biweekly.

Not only did just taking a small step of using a very crude budget make a difference in getting on top of my debt, it also allowed me to get to a place where I was able to accrue some savings for emergencies, like a flat tire...or 3.

jason0618 · ‎12-11-2016

Iheartwings, that's what I do as well. I'm four months post discharge and while I didn't have issues with credit cards before the bankruptcy, it's a good way to use them.
I pay all my monthly expenses on my discover card-- electric, cell phones, cable, car insurance etc. as well as gas for the cars, eating out...
By using this method, I'm getting 1-5% cash back on stuff I'm buying anyway, and reducing usage on my debit card and having only a few transactions monthly-- rent, doscover bill, and the few places around that don't accept Discover. Much easier to get utilization and know the money is in checking to pay it off.

Scores as of 04/2021

Gardening until further notice

Creditwiser · ‎12-11-2016

You recognized a bad pattern and made the necessary corrections. Good move. You will need to be very watchful of your INQ's going forward. Try to use what you have , keep UTL low and let the accounts and INQ's age off.