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Rock the boat?

Established Contributor

Rock the boat?

We will make our 60th Chapter 13 payment at the end of April. I am mentally preparing myself to have to continue to make payments for a few months beyond that because I fully expect our trustee to drag his feet as much as possible. I am hoping for discharge by the end of summer. Our cars are barely hanging in there (knocking on wood) and we expect that we will need to replace one or both by the end of the year. Our trade-ins will not be worth much and things are tight financially so we won't be able to save much for a down payment by then. This is really the only reason I care about our credit right now. (I really want to distance myself from the "credit game" as much as reasonably possible but I recognize it as a "necessary evil" in some situations.)

 

I have been following things on CK since (a) we won't be opening anything new for awhile and (b) it's free (see financially tight comment above Smiley Wink). According to them, our scores have slowly risen from low 600's to the 690's. But here are the issues:

(1) On TU, PNC reports our mortgage (paid outside the 13) as "open - derogatory', worst status as "current" and 0 balance even though we have never been 30 days late and the balance is about $142K. On EQ, PNC reports "closed"?!?

(2) A car loan from a local small CU that was paid off through the 13 reported us late 36 times. We thought they couldn't do that since it was IIB but our attorney said they could. The last year, they reported us current but all those lates are still on there.

(3) I have a Chase account correctly showing closed and 0 balance. But my husabnd was an AU and on his report, that account shows open and the credit limit is factored into his usage.

(4) Finally, the biggie. I started out the 13 with about $75K in student loans. We thought the entire balance would wait in the wings and come roaring back to life at the end of the BK. However, to our surprise, once the car loans were paid, a portion of our payments went to the student loans along with other unsecured debts. By the trustee's ledger, my estimated remaining balance for these loans is about $50K. But both credit reports (again CK) are showing all loans closed and only one shows a balance, of less than $10K.

 

Our (truly) open accounts are the mortgage with PNC and a $1000 secured card from almost 4 years ago. (Our attorney told us it was okay at the time but I worry that it wasn't good counsel as he was fired a couple years later - nothing I can really do about it now.) 

 

I am terrified to "rock the boat" but should I try to have any of the above corrected? If so, what? Also, anyone have any insight about what might happen with those student loans when we receive our discharge? Thank you for all the wisdom and experience you so generously share here!

Filed Chapter 13 April 2012. Case successfully closed May 2017, about 1 month after 60th payment. FAKO scores on close date: TU 695 EQ 697. Received discharge July 11th - took forever! Real EX day of discharge 624.
Message 1 of 9
8 REPLIES
Regular Contributor

Re: Rock the boat?


Math_Rocks wrote:

We will make our 60th Chapter 13 payment at the end of April. I am mentally preparing myself to have to continue to make payments for a few months beyond that because I fully expect our trustee to drag his feet as much as possible. I am hoping for discharge by the end of summer. Our cars are barely hanging in there (knocking on wood) and we expect that we will need to replace one or both by the end of the year. Our trade-ins will not be worth much and things are tight financially so we won't be able to save much for a down payment by then. This is really the only reason I care about our credit right now. (I really want to distance myself from the "credit game" as much as reasonably possible but I recognize it as a "necessary evil" in some situations.)

 

I have been following things on CK since (a) we won't be opening anything new for awhile and (b) it's free (see financially tight comment above Smiley Wink). According to them, our scores have slowly risen from low 600's to the 690's. But here are the issues:

(1) On TU, PNC reports our mortgage (paid outside the 13) as "open - derogatory', worst status as "current" and 0 balance even though we have never been 30 days late and the balance is about $142K. On EQ, PNC reports "closed"?!?

(2) A car loan from a local small CU that was paid off through the 13 reported us late 36 times. We thought they couldn't do that since it was IIB but our attorney said they could. The last year, they reported us current but all those lates are still on there.

(3) I have a Chase account correctly showing closed and 0 balance. But my husabnd was an AU and on his report, that account shows open and the credit limit is factored into his usage.

(4) Finally, the biggie. I started out the 13 with about $75K in student loans. We thought the entire balance would wait in the wings and come roaring back to life at the end of the BK. However, to our surprise, once the car loans were paid, a portion of our payments went to the student loans along with other unsecured debts. By the trustee's ledger, my estimated remaining balance for these loans is about $50K. But both credit reports (again CK) are showing all loans closed and only one shows a balance, of less than $10K.

 

Our (truly) open accounts are the mortgage with PNC and a $1000 secured card from almost 4 years ago. (Our attorney told us it was okay at the time but I worry that it wasn't good counsel as he was fired a couple years later - nothing I can really do about it now.) 

 

I am terrified to "rock the boat" but should I try to have any of the above corrected? If so, what? Also, anyone have any insight about what might happen with those student loans when we receive our discharge? Thank you for all the wisdom and experience you so generously share here!


Congrats on successfully completing your chapter 13.   Like me, I'm sure you thought it was the longest 5 years ever!  But there is a light at the end of the tunnel.  I can offer you some info on my experience with student loans while in Ch13:

 

None of the principal was paid in my CH13 - only interest every month.  I went into this blindly and had no idea of how it would work.  At the end of my payments, the following month the full payment was due on my loan.  I am very fortunate in that my loan balance is only $12k and I will pay it off by the end of this year.  So you should probably be prepared to start your payments immediately after you make your last CH13 payment.  My discharge was a few months later.  I feel like I wasted 60 months paying interest only and still left with a balance.  I wish I could have/would have made principal payments as well. 

 

If I were in your shoes and money is tight, I would focus more on building an emergency fund/cash reserves.  Credit is important but so is a good nights sleep and some peace of mind.  For me, that's some cash in the bank and all household bills being paid and current.  Rebuilding credit is a journey and easier to deal with, in my opinion, when the aforementioned is in order.  I had a very competent attorney and my payments STOPPED right after the 60th payment.  I was actually refunded a few hundred dollars!  So hopefully you won't have to go beyond 60 payments.

 

I understand your thoughts about the "credit game".  Although I am working on rebuilding my credit, my emergency, retirement and investments accounts are far more important than a 800 credit score!  Credit is a necessary evil and I want to be in the best position possible but I sleep much better at night with as little debt as necessary and a healthy bank account!

 

 

 

 

Message 2 of 9
Established Contributor

Re: Rock the boat?

Thanks for your insight, luxeprw9. I have actually been very concerned about those student loans. I still had $70-75K in student loans when we filed. According to the trustee, that balance should be down to $50-55K but, based on the tax statements I have been getting about how much student loan interest I have paid, I think all the payments have only been applied to interest. So, as much as I hate to think it, I may still have $70-75K in student loans when this is over. I am afraid that the payments will be even higher than the Ch. 13 payments have been and I am very discouraged. And I hate not knowing. Even if it is bad news, I need to know.

 

I am still not sure if I should start trying to clean things up or wait until discharge. Anyone have any thoughts?

Filed Chapter 13 April 2012. Case successfully closed May 2017, about 1 month after 60th payment. FAKO scores on close date: TU 695 EQ 697. Received discharge July 11th - took forever! Real EX day of discharge 624.
Message 3 of 9
Frequent Contributor

Re: Rock the boat?

what Lux said, good advice.

Message 4 of 9
Established Contributor

Re: Rock the boat?

Bump

Filed Chapter 13 April 2012. Case successfully closed May 2017, about 1 month after 60th payment. FAKO scores on close date: TU 695 EQ 697. Received discharge July 11th - took forever! Real EX day of discharge 624.
Message 5 of 9
Valued Contributor

Re: Rock the boat?

I am not a BK or rebuilding expert.

 

My thoughts would be to tackle the mortgage first.  Get them to report accurately.  Yes, it hurts in the DTI range...BUT it shows that you have a mortgage, you've paid the mortgage despite financial challenges, and you have an asset.

 

Then I would consider the cc.  My understanding (and this could be wrong) is that if a creditor accepts the ch 13 payments, they must report as current and paid.  They can't report you as being late in the agreement.  

 

As someone previously said, SAVE some money!!!  I am big on using cash for buying food and household items.  I take the coins and the one dollar bills and they go back into the bank.  Usually on a bill.  Right now, they go into savings to be applied towards the mountain of medical bills we are expecting.

 

My understanding (and this could be wrong) is that whatever is paid on student loans during the 13 is usually interest.  The principle stays.  And it reports as being paid/being current.  Quite a few people have come out of BK (7 & 13) to be shocked that they still owe on student loans.  You might qualify for a reduced payment or a lower rate.  Best to call the lender and talk to them.

 

Smiley Happy

Message 6 of 9
Valued Contributor

Re: Rock the boat?

Oh and about the vehicles.  Yeah, it sucks to be driving something that you worry about breaking down.

 

Take care of the vehicles, save some money, and be willing to buy another clunker at a higher than desired interest rate.  Can you survive with one car??  We do and we never thought we could.  I want to say it was close to 10 years ago that we dumped the second car.  That was with two adults working and a teenage living at home.  But we managed.  Public transportation, carpooling, walking, and communication.

 

Edited to say - you can refinance the vehicle loan after a year.  Get a lower rate.  

Message 7 of 9
Established Contributor

Re: Rock the boat?

I would completely be willing to do public transportation but it is not an option here. Where we lived when I was in grad school had decent public transportation and I rode the bus most of the time. Now, we live in a really small town. No public transportation and many of our daughter's appointments are in towns 45 - 60 minutes away. (She has autism.) We struggle to make it work with one car temporarily, like when one is in the shop; I don't see how we could make it longer term.

Filed Chapter 13 April 2012. Case successfully closed May 2017, about 1 month after 60th payment. FAKO scores on close date: TU 695 EQ 697. Received discharge July 11th - took forever! Real EX day of discharge 624.
Message 8 of 9
Established Contributor

Re: Rock the boat?


Math_Rocks wrote:

We will make our 60th Chapter 13 payment at the end of April. I am mentally preparing myself to have to continue to make payments for a few months beyond that because I fully expect our trustee to drag his feet as much as possible. I am hoping for discharge by the end of summer. Our cars are barely hanging in there (knocking on wood) and we expect that we will need to replace one or both by the end of the year. Our trade-ins will not be worth much and things are tight financially so we won't be able to save much for a down payment by then. This is really the only reason I care about our credit right now. (I really want to distance myself from the "credit game" as much as reasonably possible but I recognize it as a "necessary evil" in some situations.)

 

I have been following things on CK since (a) we won't be opening anything new for awhile and (b) it's free (see financially tight comment above Smiley Wink). According to them, our scores have slowly risen from low 600's to the 690's. But here are the issues:

(1) On TU, PNC reports our mortgage (paid outside the 13) as "open - derogatory', worst status as "current" and 0 balance even though we have never been 30 days late and the balance is about $142K. On EQ, PNC reports "closed"?!?

(2) A car loan from a local small CU that was paid off through the 13 reported us late 36 times. We thought they couldn't do that since it was IIB but our attorney said they could. The last year, they reported us current but all those lates are still on there.

(3) I have a Chase account correctly showing closed and 0 balance. But my husabnd was an AU and on his report, that account shows open and the credit limit is factored into his usage.

(4) Finally, the biggie. I started out the 13 with about $75K in student loans. We thought the entire balance would wait in the wings and come roaring back to life at the end of the BK. However, to our surprise, once the car loans were paid, a portion of our payments went to the student loans along with other unsecured debts. By the trustee's ledger, my estimated remaining balance for these loans is about $50K. But both credit reports (again CK) are showing all loans closed and only one shows a balance, of less than $10K.

 

Our (truly) open accounts are the mortgage with PNC and a $1000 secured card from almost 4 years ago. (Our attorney told us it was okay at the time but I worry that it wasn't good counsel as he was fired a couple years later - nothing I can really do about it now.) 

 

I am terrified to "rock the boat" but should I try to have any of the above corrected? If so, what? Also, anyone have any insight about what might happen with those student loans when we receive our discharge? Thank you for all the wisdom and experience you so generously share here!


Math_Rocks,

 

Congratulations on living through your Chapter 13 bankruptcy! 

 

With reagrds to PNC, I bank with them . I have the Virtual wallet accounts, a car loan, and an unsecured Visa. I did have a secured Visa opened after my discharge, but closed a year and a half later as I was able to get unsecured cards at tha point.  I know that PNC doesn't normally lend a penny to anyone until they are at least 2 years post bankruptcy. I got my car loan and credit card 4 years post bankruptcy. Since you already have a credit car and car loan, you should talk to a loan officer at the branch and see what your options are.  If not try a place like Navy Federal CU.

 

Have you you contacted your lender about your student loans? I wonder if there is an income based repayment plan or consolidation plan that you are eligible for. I would definitely focuse on getting those paid off and maximize your tax benefit.

 

I would also make saving for retirement and an emergency fund a huge priority.  

 

 

 

 

Message 9 of 9