It shouldn't. Listen, I filed BK in 2003 & 2005. The BK 13 from 2005 was deleted in Oct 2012 and the BK from 2003 is still on my reports because it was a Chapter 7. I just closed on a FHA loan on 2/6/13. I had to provide information about both BKs even though only the Chap 7 is still on my reports. They wanted an letter of explanation for the Chap 13 that is NOT on my credit reports. They also wanted to see the filling papers that had the full list of included creditors in the Chapter 13 as well as the discharge letter for the Chapter 13. They wanted more information about the BK 13 that wasn't on my reports than for the BK 7 that is still on my reports and I found that odd.
So, even though the BK is not on their credit reports, I encourage them to be up front about the BK. Being that I am now a homeowner, it doesn't mean instant denial. I think it would look worse if the BK wasn't disclosed up front and they found it in the public records later.
So, even though the BK is not on their credit reports, I encourage them to be up front about the BK. Being that I am now a homeowner, it doesn't mean instant denial. I think it would look worse if the BK wasn't disclosed up front and they found it in the public records later.
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As far as the judgement (is it a judgement or a lien?) on their credit report, I'm not sure how that will go over with the underwriters. It is good that this person has been on a payment plan as typically they want to see at least 6-12 months of on time payments. I think it can go either way with respect to the judgement. It would have been better if this person setup a payment plan with the IRS before they started collection proceedings and posted a judgement on that person's credit report. I am also on a payment plan with the IRS but I will have it paid off in a couple of months and there was no judgement or lien placed on my credit reports. I also disclosed the IRS payment plan to my LO and it was not an issue. I didn't need to write any LOEs or provide any documentation. YMMV as this person has a judgement on their credit report that is unpaid due to the repayment plan.
So are you saying the BK was removed on a couple of bureaus before it was due to fall off? What type of BK was filed in 2005?
Interesting. Yes that is early. Are you sure it wasn't a 13 that was converted to a 7? For a Chapter 7, it should have reported through 2015. I'm not sure how that is going to play out. Did this person contact a legal agency to get the Chapter 7 removed early?
If you're not sure, it is probably an unpaid tax lien on their credit report. Some lenders require 6 months of on time payments, others require 12 months. And then there may be some that don't accept it at all.
If you're not sure, it is probably an unpaid tax lien on their credit report. Some lenders require 6 months of on time payments, others require 12 months. And then there may be some that don't accept it at all.