IF I CAN HAVE A MOMENT OF YOUR TIME --

[Anonymous]

Hello all,

I've been lurking this site for quite some time now, and there's a wealth of information on here that's truly helped me with my decision to file Chapter 7. I thought it was finally time to sign up and properly introduce myself: hi!

So just some background information on myself, I'm 25 years old. About a year ago I got a solid job, income $50K/yr. I filed Chapter 7 Banko on 8/19/14. I truly wanted to avoid filing, because, I mean. C'mon. Initially, the idea of filing was not only nerve-wrecking, but scary! I had to weigh my options, though. I was being sued for a credit card I had when I was in college (all my debt accrued in college). And I'm sure they swooped in just a few months prior to the statute of limitations. Anyways, I must have had a huge "Come Sue Me!" sign stapled to my back, because another company decided to jump on board and try to sue me. Assets were frozen. Tears were shed. So I filed.

So, post-filing, my credit score JUMPED from 528 to 586! I was under the impression that the score would drop once filed. Should I still expect a drop to occur once I am actually discharged of the debts? I am still waiting for my discharge. I was told it should happen anywhere around 12/9. Of the accounts that are being updated, I still have one shown in collections for $1100 that I'm 1100% certain was included in my banko. I'm assuming that I'll have to contact the 3B's so they can update my reports accordingly? Am I right in my assumption? I also have about 24K in FEDERAL student loan debt that have been deferred until March '15. I'll start making monthly payments of about $250. Or so I've been told that's what I'll have to pay.

I guess what I'm really looking for is some advice on how to proceed from here. I want to be incredibly aggressive with this. I also have a number of personal goals I would like to reach.

First. I absolutely NEED a car. My car-pool guy is about to quit, and I'm quite a ways via Public Trans from my job. I'm scared that the interest rate will be ridiculous and I'll need to put down an insane DP. I'm projecting that perhaps a car can be attained by February, and I will just use public trans for now. The snow has yet to hit here, but I have an inkling that this is going to be a terrible winter. So a car is on my list of things I need.

Secondly, I would like to know if I should get a credit card, and if so, is one opened card good enough? I received a preapproved letter from Cap One that expires 12/10. Am I allowed to apply for a credit card without receiving my discharge papers, first, in my hands? I keep hearing that some people have department store credit cards as well as unsecured credit cards. I thought maybe I should just go to a Federal Credit Union and do a secured credit card through them. But I would love to do a take 2 with the credit card...maintain under 30% of the balance...PIF before due date...any advice on that?

Last, I currently rent. My rent is less than 20% of my monthly income, as I have roommates. I would eventually like to own a home in about 3 years. All my saving and investing is for this. Is owning realistic with a Chapter 7 Banko under my belt? I've read success stories. But it seems that the vast majority of these new home owners are married with two incomes to spare. Maybe I'm wrong, I don't know. That's why I'm asking 

I would love to get up to the 700s in a couple of years, haha. It kinda sucks that I'll be 35 when this falls off of my credit report. But I'm determined to make the best of the new start. Any and all advice/comments would be greatly appreciated. Thank you for your time

[0REDSOX7]

Hi.

Welcome to the forums.  Most of us here have been in your shoes and understand what it feels like.  Rebuilding can be done - and will take persistiance and patience.  For me, focusining on a robust credit profile is way more important than the credit score.  Build the profile, and the score will come. 

With that said, this post will be your friend.

http://ficoforums.myfico.com/t5/Bankruptcy/HOW-TO-From-BK7-discharge-to-700-in-24-months-or-less/td-...

So - for some of your basic questions.

1) You can get a car out of BK - I got two of them five days post discharge.  Yes, the rates were high, but be patient, and refinance in six months to a year.  I originally got 12.99 and 18.99 - but refinanced both of them down to 2.69 seven months post discharge.  I only had to put down $500 a piece.  If you're going to need a car right after discharge, work on cleaning up your credit reports as soon as you can - this way, when you have your papers of discharge in hand - you can walk in to the dealership with the best possible scenario.

2) Yes - you can get a credit card.  Three of them are idea from a scoring perspective.  Yes, you can apply for a CC before your discharge is granted.  Should you do so?  Most of us here say you should wait - just to be safe.  There are no laws the prevent you from getting one before discharge, but most of us here will play it safe.

3) If you currentl do not have a mortgage - you will be eligible for an FHA loan three years from your discharge date.  Lenders who issue the FHA loans may have their own guidelines on top of the FHA ones, but, generally speaking, as long as you have three years and no late/derogatory items SINCE your filing, then you will be good to go.

700 in a few years is definately obtainable - read the thread I posted and you will be good to go!

Good luck!

[Anonymous]

Thank you so much for the response! That's awesome that you were able to get TWO cars, and at that interest rate and refinance it to such a low rate. Ah, that gives me hope.

I applied for Cap1, was approved for $300. My attorney said discharge is coming any day now and I should start rebuilding. Should I leave it to just one credit card for now? Should I apply for another one? I'm kinda having some anxiety over having taking out the one...I keep reading different information about how many cards one should apply for and the utilization of the cards. I was thinking 30% and PIF when the statement arrives. I'll probably just do autopay for my Xsport membership...it's only $20.

I have read the 700 in 24 months thread. It looks solid. I may have jumped the gun already, though. :/

[tallin32]

One thing that hasn't been touched on--from my experience (filed BK chapter 13 in December 2013, converted to Chapter 7 and was discharged in April of 2014), if your score didn't drop when you filed, your score won't drop when debts are discharged.  My score started out at 456 and jumped nearly 100 points during the process (I think there was maybe a 4 point drop after that when my student loans changed their status).