Oh mikey! I so feel your pain but it takes time. Debtors used to be thrown in BK prisons a long time ago so the consequences of BK are meant to hurt.
The timeline for filing another BK is as follows:
2nd BK 7, must be 5 years from the first BK filing.
2nd BK 13, must be filed at least 2 years from the filing date of a 7 and 5 years from the filing date of a previous 13..
So the timeline is much shorter for filing a second BK.
I filed twice for two different reasons, both of which, were not due to purposely running up debt. I have been waiting a long time as well...8 years from the second BK and almost 10 years from the first BK. During my earlier waiting years, I did not focus on it...as doing that made it worse. I paid cash only, checked my credit infrequently, and focused on my family and my job.
It is virtually impossible to distinguish good BKs from bad BKs. Plus the whole intent of BK is to punish those so that they think long and hard about getting into it again. I know it must be tough not being able to restart your business again. But unfortunately, that is the way it is. At least we don't go to prison anymore, right?
Banks have been stripped of many of their rights to reclaim the monies owed to them after a BK is filed. When you file a BK 7 or 13, unsecured creditors are paid last and only if there is another left in your estate to pay them. This rarely happens so Banks lose a lot of money from BK filings. Take for instance a house or a car loan...you can get both shortly after BK BECAUSE the loans are secured by assets and Banks can use those assets to recoup some of the money lost. The less creditworthy pay higher interest for credit so that Banks can use those extra funds to recoup the remaining lost due to another customer's BK or default. Just as you come up with ways to keep your business from folding...Creditors use the higher interest paid to keep the bank afloat and they are choosy about the new customers they accept to manage risk so that the banks don't go under. No one, especially the government, want to see banks they are too big to fail, fail again, as everyone in the country has to bail them out and it damages our economy (banks stop lending, people lose their jobs, and if the Feds don't intervene, people lose their monetary assets invested in the bank) and it puts innocent citizens in the crossfire. The housing market crash was due to subprime mortgage lending. So the stricter lending requirements protect everyone.
Unsecured cards are granted without an asset. So if you default, the banks lose. With mortgages and cars, if you default, the Bank gets your car and/or your house. However, as we learned from the housing market crash, the houses nor higher interest rates are enough to offset the losses from a massive amount of people going into foreclosure as the losses due to short sales and decreasing property values offset the benefit of the assets the money was loaned against. If the same thing happened to the credit card industry, the losses would be massive due to the lack of security. Banks have learned the hard way through the housing market crash that the subprime industry is very risky with dire consequences if that risk becomes reality. So much so that taking the risk for a higher return is not worth it. So mortgages are harder obtain now and more expensive (if backed by FHA as PMI has increased to replenish the lost of funds the Feds gave to the banks for foreclosures) then they were before the crash.
In order for the laws to change, Banks will request the right to a higher priority to collect unsecured debt and that just isn't going to fly with Elizabeth Warren and others in the Congress and Senate. The only debts that are currently non-dischargable are student loans and taxes. Why? Because the government always gets first priority. They revamped the BK laws back in Oct 2005. I remember I was in a long line of people trying to file before the new laws went into effect because they changed the Ch 13 law to require that the full outstanding balance be repaid for auto loans versus the Kelley Blue Book value for the car. Additionally, they changed the wait period to file another Ch 7 from 2 years to 5 years. But Creditors didn't get what they lobbied for entirely. Banks/Creditors also wanted unsecured debt to have to be paid back in a Ch 13. Consumer Protection advocates argued that it would potentially make the Ch 13 payments too burdensome which would defeat the purpose of BK, which is a fresh start. What they did change was the time period between filing two Ch 7's and made the requirements tougher for filing a 7 so that it forces people that screw up again to file a Ch 13 and repay back some of the debts owed. But there is still a loophole. Consumers can rather easily convert to a 7 before the 13 plan is paid off, rendering more losses to the Banks. So the only way the laws will change that correspondingly lead to less strict underwriting requirements for unsecured debt is if the Banks are granted more power to collect a debt through BK and that just isn't going to happen because many will argue it defeats the purpose of filing a BK.
On another BK thread, I wrote a long post about my BKs and my timeline for rebuilding. You are doing a fantastic job rebuilding and are much farther along than I was 4 years after BK. if I remember correctly, you filed a 13 correct? If so, you have about 3 years to go before doors with prime lenders really start to open for you as that is when you will be BK free. You accomplished the impossible with Chase as they are known to blacklist those who filed BK on them. And they lost an enormous amount of money through the collapse of your business so I would be very grateful that you got back in the door with Chase.
Do you have a 401K or other type of retirement account? If yes, have you considered borrowing against your 401K to restart your business now? In 3 years, you will be able to get back in with prime lenders and you can use the credit extended to further expand your business.
The timeline for filing another BK is as follows:
2nd BK 7, must be 5 years from the first BK filing.
2nd BK 13, must be filed at least 2 years from the filing date of a 7 and 5 years from the filing date of a previous 13..
So the timeline is much shorter for filing a second BK.
I filed twice for two different reasons, both of which, were not due to purposely running up debt. I have been waiting a long time as well...8 years from the second BK and almost 10 years from the first BK. During my earlier waiting years, I did not focus on it...as doing that made it worse. I paid cash only, checked my credit infrequently, and focused on my family and my job.
It is virtually impossible to distinguish good BKs from bad BKs. Plus the whole intent of BK is to punish those so that they think long and hard about getting into it again. I know it must be tough not being able to restart your business again. But unfortunately, that is the way it is. At least we don't go to prison anymore, right?
Banks have been stripped of many of their rights to reclaim the monies owed to them after a BK is filed. When you file a BK 7 or 13, unsecured creditors are paid last and only if there is another left in your estate to pay them. This rarely happens so Banks lose a lot of money from BK filings. Take for instance a house or a car loan...you can get both shortly after BK BECAUSE the loans are secured by assets and Banks can use those assets to recoup some of the money lost. The less creditworthy pay higher interest for credit so that Banks can use those extra funds to recoup the remaining lost due to another customer's BK or default. Just as you come up with ways to keep your business from folding...Creditors use the higher interest paid to keep the bank afloat and they are choosy about the new customers they accept to manage risk so that the banks don't go under. No one, especially the government, want to see banks they are too big to fail, fail again, as everyone in the country has to bail them out and it damages our economy (banks stop lending, people lose their jobs, and if the Feds don't intervene, people lose their monetary assets invested in the bank) and it puts innocent citizens in the crossfire. The housing market crash was due to subprime mortgage lending. So the stricter lending requirements protect everyone.
Unsecured cards are granted without an asset. So if you default, the banks lose. With mortgages and cars, if you default, the Bank gets your car and/or your house. However, as we learned from the housing market crash, the houses nor higher interest rates are enough to offset the losses from a massive amount of people going into foreclosure as the losses due to short sales and decreasing property values offset the benefit of the assets the money was loaned against. If the same thing happened to the credit card industry, the losses would be massive due to the lack of security. Banks have learned the hard way through the housing market crash that the subprime industry is very risky with dire consequences if that risk becomes reality. So much so that taking the risk for a higher return is not worth it. So mortgages are harder obtain now and more expensive (if backed by FHA as PMI has increased to replenish the lost of funds the Feds gave to the banks for foreclosures) then they were before the crash.
In order for the laws to change, Banks will request the right to a higher priority to collect unsecured debt and that just isn't going to fly with Elizabeth Warren and others in the Congress and Senate. The only debts that are currently non-dischargable are student loans and taxes. Why? Because the government always gets first priority. They revamped the BK laws back in Oct 2005. I remember I was in a long line of people trying to file before the new laws went into effect because they changed the Ch 13 law to require that the full outstanding balance be repaid for auto loans versus the Kelley Blue Book value for the car. Additionally, they changed the wait period to file another Ch 7 from 2 years to 5 years. But Creditors didn't get what they lobbied for entirely. Banks/Creditors also wanted unsecured debt to have to be paid back in a Ch 13. Consumer Protection advocates argued that it would potentially make the Ch 13 payments too burdensome which would defeat the purpose of BK, which is a fresh start. What they did change was the time period between filing two Ch 7's and made the requirements tougher for filing a 7 so that it forces people that screw up again to file a Ch 13 and repay back some of the debts owed. But there is still a loophole. Consumers can rather easily convert to a 7 before the 13 plan is paid off, rendering more losses to the Banks. So the only way the laws will change that correspondingly lead to less strict underwriting requirements for unsecured debt is if the Banks are granted more power to collect a debt through BK and that just isn't going to happen because many will argue it defeats the purpose of filing a BK.
On another BK thread, I wrote a long post about my BKs and my timeline for rebuilding. You are doing a fantastic job rebuilding and are much farther along than I was 4 years after BK. if I remember correctly, you filed a 13 correct? If so, you have about 3 years to go before doors with prime lenders really start to open for you as that is when you will be BK free. You accomplished the impossible with Chase as they are known to blacklist those who filed BK on them. And they lost an enormous amount of money through the collapse of your business so I would be very grateful that you got back in the door with Chase.
Do you have a 401K or other type of retirement account? If yes, have you considered borrowing against your 401K to restart your business now? In 3 years, you will be able to get back in with prime lenders and you can use the credit extended to further expand your business.
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And when lenders ask why you filed BK when going through the recon process, anyone can lie and say it was due to a medical issue, job loss, or the death of a spouse. There is no way a bank can verify your statements as the reason you filed is not recorded. So banks make you wait almost a decade for prime cards because they hope that whatever the reason was for filing, that you recovered financially and know how to successfully manage credit.
@Matt6995 wrote:While I fully rspect LS's opinion I have to disagree that BK is always the filers fault.
I was a passenger in a vehicle that was hit by a semi truck going over 60 MPH back in 2003. The collision killed my friend and left me in the hospital for over 3 months.
Trucking company and driver both filed bankruptcy and had no insurance.
I lost my job from being in the Hospital and even with Charity and other help still owed over $160,000 in medical bills plus rehab.
It was stacks of letters with threats to sue along with daily phone calls.
It was almost another year before I was able to work again but there was no way I was ever going to get out from under those bills so I filed bankruptcy.
I paid for that for over 7 years of my life and still have reaged accounts show up from time to time.
Medical bills should not be alowed to be listed on credit reports. This is of course only my opinion.
So I do believe in limited circumstances BK may be the only choice.
+1 I don't think you have to justify to others your reasons for your BK. Obviously BK isn't perfect but I think it's far more important what a person does who finds themselves in that situation.
To the OP: I wish you luck in your credit journey. I'm sure it can't be easy.
Didn't you mention that you had a ton of inquiries on your reports? Including 10 or so new cc's? Even without the bankruptcy I'd say it'd be slighly more difficult to get a card in general...
I can't follow how many cards OP has. At one point I thought the OP said they had a single card(Cap1, $750) then I thought it said 10 cards. . .
OP: Did you burn AMEX for a large amount with your BK? If you did, you should probably stop wasting apps on them. Especially if they are cancelling your apps before pulling your reports. And not to be rude, but you might want to work on grammar before you start your blog.
@b_seeker wrote:I can't follow how many cards OP has. At one point I thought the OP said they had a single card(Cap1, $750) then I thought it said 10 cards. . .
OP: Did you burn AMEX for a large amount with your BK? If you did, you should probably stop wasting apps on them. Especially if they are cancelling your apps before pulling your reports. And not to be rude, but you might want to work on grammar before you start your blog.
Work on my grammar. lol I was on late last night could hardly keep my eyes open when I wrote all that I wrote alot of replies last night. Thanks for all the info guys. I agree with you too many credit inquiries is 1 issue. Chase said I have to establish more credit before any increases because of the huge amount they lost. To the one person who asked if I filed chapter 13 I filed 7. I don't have a 401k or anything. To get the answer correct I have 9 personal cards and 1 Capital One Spark Visa $750 limit.
This is my last ditch effort I am getting Citi to reconsider me for Simplicity card The I quit for this year. I have the following cards:
Sears Platinum MC $4k limit opened 01/2013
Cap 1 MC $1k opened 02/2011
Cap 1 Playstation Visa $1,250 opened 07/2012
HSBC/Cap 1 Discover $500 opened 12/2010
Chase Slate $700 opened Feb 2013
Then I have the following store cards:
Walmart: $1500
Amazon: $1100
Giant Eagle Gas Card $500
Paypal Smart Connect : $1093 (hooked up as back up to my debit card and earn 1% cash back) All these opened 03/2012
And 1 Cap 1 Visa Spark Business card - opened 03/2012
And to some of the rude persons who basically say people who file bankruptcy are at fault and they should have to pay it all back and insulting me for not knowing how to run a business let me tell you something. You don't know me or other peoples situations so please don't be rude on these forums ... And there is a bureau. The Consumer Bureau of Financial Protection who regulates credit. consumerfinance.gov they helped me with numerous things with credit bureaus. I just asked a question about why banks do this I did not come to get jumped on and make me feel like a piece of trash I never wanted to file bankruptcy.. I had a self defense products website it did well for 4 years then too much competition set in and I sold for a drop ship company out of North Carolina. I spent thousands on building the website and advertising and to keep all the customers happy I went bankrupt after the housing market crash My credit cards jacked my aprs all of them over 25% and I owed $80,000 in between personal and mostly business cards. If I had the money I would pay it back. I just paid back 2 charge offs that my wife opened after bankruptcy Swiss Colony behind my back and set me back $1000 and it made my credit score go up.
But the bottom line is you cannot weed of the bad bk from the good folks like you say. I will just wait a couple years before attempting anymore apps and definately not any more amex apps. I never filed bk on them I had one in 2008 and closed it out chase took the whole $16k balance and transfered it. So I do go something to look foward to in 2017 if 8 years is correct for amex accepting bk or it will be 2019. Seems like a long time but the way time flies I'll be there I just had a birthday last year in my 20's.
Starting Score: TU:599 EXP: 596 EQ: 595 Starting Year 2009