@matt14 wrote:
Hello everyone,
Hopefully someone has had this experience and could provide some insight. I have a couple of questions regarding how debts are reported after a Chapter 13 plan is complete and accounts falling off after filing.
A little background, i filed Chapter 13 in November 2019. All of my accounts are now updated on my credit report showing 0 balances with the note 'wage earner plan'. My home(2nd mortgage only) and car are both set to get paid out in the plan. I have a 1st and 2nd mortgage of which I pay the 1st mortgage outside of the plan and the 2nd (which was a balloon) is set to be paid off under the plan.
My questions:
1. Will my 1st mortgage balance/payments ever show on my credit since i am technically still paying them outside of the plan?
2. I also have 2 student loans that are showing 0 balances but are not included in my plan. Will these start to report again (with the balance) once i have completed my 5 year payment plan?
3. Is it normal for accounts(credit cards) to be removed from a credit proile after the Ch 13 filing? (I had several Synchrony accounts to be removed from all 3 of my credit reports) and will they ever come back?
To answer question #1, it depends on whether you have reaffirmed the debt, or are just keeping the payments up to date. All legal responsibility for debts cease when BK is filed and debt is discharged. That is at least the case with chapter 7. Some lenders require a reaffirmation, which is like a new debt, but in either case BK does not cancel any liens. Non-reaffirmed debt that is continuing to be paid will not show new payments good or bad, as the debt itself is no longer enforcable, but the valid lein can be executed in foreclosure. As for question 3, the credit card issuers are required by law to indicate that the debt was included in bankruptcy, if they report it at all. Some might find it easier to just not continue to report it. With the bankruptcy on the report there is little if any effect from debts before the bankruptcy anyway. Everything I just said is true for chapter 7 in most States, but I am not really sure it all holds true for chapter 13. You can usually keep your house and car with either chapter provided the equity in the house does not exceed the legal exemptions for chapter 7. Neither chapter will discharge student loan debt, but I do not know how it is handled on credit reports. I know that sometimes a chapter 13 is filed solely because the equity in a house exceeds the chapter 7 exemptions, which would require the debtor to sell the property to pay the creditors. Sometimes the debtor may have too much income to qualify as well, because chapter 7 requires a means test, where chapter 13 does not. If the lender of debt secured with a house or car does not require a re-affirmation agreement, it is nearly always better not to sign one, especially on a car. You will not receive the title to either until the lein is satisfied, but if not reaffirmed, but still retained, and later the engine blows up, you can let it go without a repo showing on your credit report. If discharged in bankruptcy, and not reaffirmed, the vehicle can be reposessed due to the lein, or surrendered by the debtor with no affect on your credit report at all. That is because the debt itself was discharged so the debtor is not legally liable for the debt. The lein is still enforcible though, but it is rare in most States for the lender to repossess the car if not delinquint. If reaffirmed there is a new debt on the car, and that debt and any defecit that it incurs will be enforcable by law, just like any other post bankruptcy debts. At the very least, be sure the property is worth more than is owed on it before reaffirming the debt. Otherwise you could 2 weeks later total the car, and you will be legally liable for the deficit when the insurance fails to cover the lein.
TU fico08=812 07/16/23
EX fico08=809 07/16/23
EQ fico09=812 07/16/23
EX fico09=821 07/16/23
EQ fico bankcard08=832 07/16/23
TU Fico Bankcard 08=840 07/16/23
EQ NG1 fico=802 04/17/21
EQ Resilience index score=58 03/09/21
Unknown score from EX=784 used by Cap1 07/10/20
)