cancel
Showing results for 
Search instead for 
Did you mean: 

BK Effect on FICO Scores

tag
Ned505
Contributor

BK Effect on FICO Scores

I have some very old CO's  But they are within SOL. My scores have been going up with continue payment on time on new accounts which are my re-building plan. 

 

I am at a point of considering a Ch 13.  (income is abouve 80,000) as the old accounts are threatening to sue.

 

I would llike to pay off the active and working accounts that have been helping me increase my score, and keep them $0 Bal through the Ch. 13, to help me on the other side. 

 

My question is will those accounts close me out if and when I file?

 

Any advice is appreciated.

Message 1 of 9
8 REPLIES 8
Anonymous
Not applicable

Re: BK Effect on FICO Scores

You will be required to report ALL open accounts to your attorney and trustee/court, though you'll only file against those with outstanding balances. Additionally, you will be limited or precluded from undertaking new debt without permission from the trustee during the 3 or 5 years of your case, so you likely would only be able to use those open accounts at the risk of dismissal of your bankruptcy. All that said, sometimes an open account DOES survive a Chapter 13, but it's rare -- most creditors will close their existing accounts with you shortly after you file.
Message 2 of 9
Anonymous
Not applicable

Re: BK Effect on FICO Scores

Your credit is going to take a big hit again if you file Chapter 13. If you go down that road I would not be  concerned about keeping a couple of credit cards open  since the Trustee will be watching everything you do for 3 or 5 years while your case is open.

 

How much debt are you talking about? You make good money...can you not just pay it back? Are the lenders threatening you or credit collection companies? How old are the debts? Your best course of action may be no action at all. Let them sue you and try and collect. If they follow through with their threats and do secure judgment against you then you could file knowing your back is against the wall.  If they have not retained a attorney in your area yet they are probably just trying to scare you into paying. Based on what you have said so far I would not file at this time.

Message 3 of 9
QueenBean
Regular Contributor

Re: BK Effect on FICO Scores

If you have the ability to access any lump sums of cash, it might be worth it to try to negociate PFD  You could probably negociate for 20% or so.

Starting Score: 527
Current Score: 679
Goal Score: 800


Take the myFICO Fitness Challenge
Message 4 of 9
maggie88
Valued Member

Re: BK Effect on FICO Scores

I am glad I read this thread.  I am still reeling from a new bankruptcy just finished this past Friday. The Trustee made me feel like I went out and racked up my cards and then decided to go bankrupted. You can't explain and there is no one to represent you. I'm still sizzling hot over this.  But I am glad I read your thread on I'll be watched for 3-5 years.

 

I saw that part where a person was trying to keep credit cards open. Forget it. The companies themselves will close them regardless if you paid them or not or did not include them in the bankruptcy. They are automatically closed.  That was a hard pill to swallow...yet good and relieved really.

 

But how can I build up slowly a history and proving my worth again?

 

Message 5 of 9
QueenBean
Regular Contributor

Re: BK Effect on FICO Scores

The best advice I can give you is to spend some time reading these boards.  Oh I wish I had found this forum before I spoke with a BK attorney.

 

Good Luck & Best Wishes


Starting Score: 527
Current Score: 679
Goal Score: 800


Take the myFICO Fitness Challenge
Message 6 of 9
Ned505
Contributor

Re: BK Effect on FICO Scores

 

Thank You Creditguy45:

 

My FICO score in 2005 was a 740.  Little to no unsecured debt.  House with equity, too.  I started a business and the nice CR and lots of unused balances became my "income" through 2006 and 2007.  After 11/2007 I could not keep up.  I managed to sell house (PIF) no forclosure.  I own my vehicle free and clear. 

 

I settled a chunck of unsecured ($32,000) in early 2008.  The CO old balances are about $70,000 and aging.  DOLA is going on 1-2 years. 

 

One local bank with local CA is threatening and making me nervous. 

 

I have decided not to file and to hunker down.  My W2 income will be above the median this year.  All open accouonts are in good shape. 

 

My hope is to negotiate with the most aggressive creditors first and work out a long term plan.

 

And stay out of BK.

 

Thank you for your responses. 

Message 7 of 9
Anonymous
Not applicable

Re: BK Effect on FICO Scores

You are welcome. I hope they settle with you for twenty cents on the dollar. Sometimes bankruptcy is a good answer and I have recommended it to a couple other people here. For me it was the only choice.  I had a good business for 20 solid years and then 2008 came. Business fell off completely and the stock market wiped out way over 6 figures of cash. To top it off I was in a 3 year lawsuit from hell that only payed out a quarter what my "great" attorney said it would when I pursued it.

So I filed Chapter 7 without waiting for my credit report to show a bunch of late payments or any collections.

I did not want to be under the nose of the Trustee  and I had a limited window to qualify for 7. Next week all my debts (business and personal) will be gone forever!

I was able to keep my house (with significant equity),  2 cars which are paid for, the couple of bucks left in the retirement account and all my personal property except for my Harley (I don't really care...and I will have the option to repurchase it).

My credit went from high 700's to mid 500's after the filing.  I am hoping it will be back in the 600's in December which is when I get my next quarterly credit score.

 

There are a lot of people going thru the same stuff. That is why I am sharing my experience. It will get better .

 

Good luck to all who post or read here! Life is too short to be worring about money all the time.

Message 8 of 9
Anonymous
Not applicable

Re: BK Effect on FICO Scores

There is an emergency BK which stops everything cold and give's you time to regroup and then you can cancel it.  Ask a lawyer or go to the court house and ask them.  I got my forms at Barnes and Noble.  They are called NOLO Bankruptcy forms.

 

Be careful and get a good lawyer if you need one.  Mine was a edited.

 

Also you can file 13 and if it doesn't work out go chapter 7.  These laws are from 1999.

 

My BK just fell off EQ and score went to788 with high credit usage.

 

  

Message Edited by casinoannie97 on 11-22-2009 11:19 AM
casinoannie97, your post was edited to remove an expletive. Please don't use that in the future. Thanks, llecs, myFICO moderator.
Message Edited by llecs on 11-22-2009 07:38 PM
Message 9 of 9
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.