topic Re: Post BK13 Questions in Bankruptcy

Post BK13 Questions

Anonymous — Tue, 16 Mar 2021 13:06:07 GMT

A little background first. I had no late payments before filing, the only reason I had to file was I had signed for a loan for my parents for a house many years ago(I know mistake) they were making the payments and with documentation of that I was able to get a loan for my own home. Then my dad passed away. With out getting to into it, the bank that held the loan on their home screwed me. All my other bills I was never late on. So I filled BK13 and kept paying my current home mortgage outside of my plan. So my final payment is coming up on 05/22/21, and as soon as I am discharged I stand to make a good deal of money selling my house because I bought it as a fixer upper and it's worth almost 3 times what owe on it. My girlfriend and I are going to buy a house together and one of my questions is should I be listed on the mortgage as a co-signer or just let her be on it alone? Other question on rebuilding my credit, I just signed up for a chime card(I asked my lawyer first) I there another secured card that is a good one to start with? Also I'm sure the question is on here somewhere but do the 7 years that BK13 stay on your record start from the date that you filed? Thanks ahead of time

Re: Post BK13 Questions

Horseshoez — Tue, 16 Mar 2021 13:40:34 GMT

@Anonymous wrote:
A little background first. I had no late payments before filing, the only reason I had to file was I had signed for a loan for my parents for a house many years ago(I know mistake) they were making the payments and with documentation of that I was able to get a loan for my own home. Then my dad passed away. With out getting to into it, the bank that held the loan on their home screwed me. All my other bills I was never late on. So I filled BK13 and kept paying my current home mortgage outside of my plan. So my final payment is coming up on 05/22/21, and as soon as I am discharged I stand to make a good deal of money selling my house because I bought it as a fixer upper and it's worth almost 3 times what owe on it. My girlfriend and I are going to buy a house together and one of my questions is should I be listed on the mortgage as a co-signer or just let her be on it alone? Other question on rebuilding my credit, I just signed up for a chime card(I asked my lawyer first) I there another secured card that is a good one to start with? Also I'm sure the question is on here somewhere but do the 7 years that BK13 stay on your record start from the date that you filed? Thanks ahead of time

I'm a little over a year in front of you so I have some experiences which may be helpful:

Regarding the mortgage; it is certainly easier if you are not a co-applicant, my understanding is, unless you wait two full years from your discharge, the mortgage will need to be manually underwritten if you are one of the applicants. My wife and I are kind of in the same boat, my Chapter 13 did not include her (she filed a separate Chapter 7 the year before I filed), so she can apply for a standard FHA mortgage, however, I will need to wait until next spring before I can.
Regarding credit cards, specifically secure cards; the easiest to get is a CapitolOne card, however, you can only get a maximum of $1,000 for a credit limit, that and CapitolOne has a reputation of being very spotty when it comes to unsecuring the cards and returning the security deposit. In my case, I leaped before I looked and opened the CapitolOne card, realized it's short comings, and closed it after six weeks in favor of a TDBank secured card with a limit of $5,000 (which was unsecured after six months). In your case I'd recommend either that card, assuming you live in one of the states TDBank operates, and/or a Secured Discover card (also with a good reputation for unsecuring after six months). Navy Federal and (and I think Pentagon Federal as well) credit union is also well regarded for their secured cards.
Regarding the length a Chapter 13 stays on your record, yes, it is 7-years from the filing date; add another month or so to be sure it falls off your credit report. You can also apply for "Early Exclusion" from at least two of the three credit bureaus (not sure which of the three at the moment, other threads here spell that out); I'll be exploring that route later this year.
Two other items of note; if you do not currently have a car loan or other personal loan, you might want to join a credit union and take out a "Share Loan" or "Credit Builder Loan" to have that on your record, and make sure you obtain at least three major credit cards (secured or otherwise); having the loan plus the three credit cards will help build your scores more rapidly.

Re: Post BK13 Questions

dragontears — Tue, 16 Mar 2021 14:02:38 GMT

@Anonymous wrote:
A little background first. I had no late payments before filing, the only reason I had to file was I had signed for a loan for my parents for a house many years ago(I know mistake) they were making the payments and with documentation of that I was able to get a loan for my own home. Then my dad passed away. With out getting to into it, the bank that held the loan on their home screwed me. All my other bills I was never late on. So I filled BK13 and kept paying my current home mortgage outside of my plan. So my final payment is coming up on 05/22/21, and as soon as I am discharged I stand to make a good deal of money selling my house because I bought it as a fixer upper and it's worth almost 3 times what owe on it. My girlfriend and I are going to buy a house together and one of my questions is should I be listed on the mortgage as a co-signer or just let her be on it alone? Other question on rebuilding my credit, I just signed up for a chime card(I asked my lawyer first) I there another secured card that is a good one to start with? Also I'm sure the question is on here somewhere but do the 7 years that BK13 stay on your record start from the date that you filed? Thanks ahead of time

So couple of questions regarding whether you "should" be on the new mortgage.

Can her income/DTI alone support the new house? If not you will have to be on the loan.

What are your mortgage scores?

What are her mortgage scores?

The previous post was incorrect about having to wait 2 years from discharge; that is specific to chapter 7 not 13, people in active chapter 13 have gotten mortgages (with the court's approval)

Re: Post BK13 Questions

Horseshoez — Tue, 16 Mar 2021 14:36:29 GMT

@dragontears wrote:
The previous post was incorrect about having to wait 2 years from discharge; that is specific to chapter 7 not 13, people in active chapter 13 have gotten mortgages (with the court's approval)

No, the information was not incorrect; please reread what I wrote.

Re: Post BK13 Questions

Anonymous — Tue, 16 Mar 2021 15:17:39 GMT

Her all I have to go on right now it credit karma scores, hers is around 760, mine are all over the place as my transu shows 591 and my equifax shows 701. As far as her DTI she has a few other things she will have paid off in the next few months, certainly before we plan on getting a new house, so she my be able to, but that depends on what price range we find a house in.

We live in Michigan BTW.

Re: Post BK13 Questions

Anonymous — Thu, 18 Mar 2021 18:35:24 GMT

Trying to do some research online and I keep seeing that I need to get trustee approval to get a mortgage? Once I get a discharge do I still need approval?

Also I was paying for my mortgage outside of my BK13 so I was making a $430 mortgage payment plus my $600 plan payment. My mortgage is still listed on my credit report as in good standing.

Re: Post BK13 Questions

Horseshoez — Thu, 18 Mar 2021 18:43:54 GMT

@Anonymous wrote:
Trying to do some research online and I keep seeing that I need to get trustee approval to get a mortgage? Once I get a discharge do I still need approval?
Also I was paying for my mortgage outside of my BK13 so I was making a $430 mortgage payment plus my $600 plan payment. My mortgage is still listed on my credit report as in good standing.

Once you are discharged you no longer need Trustee approval, however, you will need to find someone willing to manually underwrite your new mortgage until you've hit the 7-year point since filing.

Re: Post BK13 Questions

Anonymous — Thu, 18 Mar 2021 18:49:25 GMT

Ok thanks for that info.

Re: Post BK13 Questions

tooleman694 — Mon, 22 Mar 2021 20:45:42 GMT

From what I understand, after discharge there is no FHA waiting period however there is for conventional. My situation was crappy because I included my house in my BK13 and lenders look at it as a foreclosure. I can't get a conventional for years.

Re: Post BK13 Questions

Anonymous — Mon, 22 Mar 2021 21:23:23 GMT

OP, regarding scores - disregard Credit Karma scores altogether. They aren't used by lenders. You need your FICO scores, specifically the mortgage variants. I'll put up the bat signal for @AllZero as he has a link to a source of free mortgage scores.

Re: Post BK13 Questions

Horseshoez — Mon, 22 Mar 2021 21:30:24 GMT

@tooleman694 wrote:
From what I understand, after discharge there is no FHA waiting period however there is for conventional. My situation was crappy because I included my house in my BK13 and lenders look at it as a foreclosure. I can't get a conventional for years.

Sorry, unfortunately the 2-year waiting period for an FHA mortgage is true, regardless of whether the discharge was for a Chapter 7 or a Chapter 13. If you don't believe me, you can download the FHA rule book and see for yourself. Like you I too had been led to believe the waiting period was for only Chapter 7 discharges, but the rule book is quite specific.

Re: Post BK13 Questions

tooleman694 — Mon, 22 Mar 2021 21:41:59 GMT

Which sounds crazy to me because you can get an FHA loan while in BK13. But have to wait 2 years after discharge. What the heck.

Re: Post BK13 Questions

Horseshoez — Mon, 22 Mar 2021 21:45:41 GMT

@tooleman694 wrote:
Which sounds crazy to me because you can get an FHA loan while in BK13. But have to wait 2 years after discharge. What the heck.

Well, yes and no; while you can get an FHA mortgage during a Chapter 13, it is only with Trustee approval, and mostly for hardship cases. For the rest of us, you absolutely cannot get an FHA mortgage without extenuating circumstances until 2-years have passed.

Re: Post BK13 Questions

AllZero — Mon, 22 Mar 2021 22:21:38 GMT

@Anonymous wrote:
OP, regarding scores - disregard Credit Karma scores altogether. They aren't used by lenders. You need your FICO scores, specifically the mortgage variants. I'll put up the bat signal for @AllZero as he has a link to a source of free mortgage scores.

👍🦇

Free or $1 you can obtain your 3 bureau FICO 8 scores and reports at Experian or CreditCheckTotal (part of Experian). Cancel in 7 day or less to avoid the re-occurring monthly charge. Wash, Rinse, and Repeat as needed.

AnnualCreditReport. Free weekly 3 bureau online reports through April 2021.

Free credit reports (disregard the VantageScore 3.0 score) at:
Credit Karma for weekly TU and EQ reports.
WalletHub for daily TU report.

Re: Post BK13 Questions

AllZero — Mon, 22 Mar 2021 22:22:52 GMT

Free mortgage scores

EX2 + 3 Bureau scores and reports for free or $1 at Experian or CreditCheckTotal (part of Experian). Cancel in 7 days or less to avoid the reoccurring charge.

TU4 WyHy quarterly score. Not sure on membership requirement. Maybe hard pull TU?

EQ5 Get a savings account with DCU. Soft pull EQ to be a member. Free monthly score.

You can also obtain your 3 bureau mortgage scores at . Cancel plan after you obtain your scores and reports to avoid re-occurring monthly charge.

Re: Post BK13 Questions

SB_F — Sat, 27 Mar 2021 17:07:45 GMT

On BK13, you might as well set yourself up to get a conventional mortgage at 24 mo after discharge, whether it is a refi or a new house. That will give you the best rates and no PMI w/ 20 % down. Plus you will have a lot more places to apply. My BK13 was filed Nov 2013, but due to trustee arguments (that he eventually lost), I wasn't discharged until until July 2019, seven months after plan was paid (so I was the one that really lost). So now I have to wait until July 2021 to apply to get the best rate. My mortgage was paid outside of BK and was sold several times ending up with NewRez. NewRez sends me emails several times a week encouraging me to refi with them. When I call, the agent says oh yeah, you are definitely eligible now. I say please verify, and a few days later they come back with oh sorry, we have to wait until two years post discharge ...

My mortage pmt is just a little bit bigger than yours, and my house has gone up a similar amount. After doing the math, it made sense for me to keep paying my higher rate (5.75%) rather than paying all of the closing costs only to need to refi again in July 2021. I've just been focusing on rebuilding, so I'll be ready when the day comes to pull the trigger.

If you want to refi or buy before then and don't want to sign over house to GF with no recourse (at least in my state and my bank), I would go with someone like People's Bank & Mortgage or similar where they make BK involved loans and hold them in house. I would get the loan with the least closing costs or even no closing costs (rolled into a higher rate). Then when you reach two years post discharge, you can refi without losing the closing costs. Do the math every way possible.

Good luck!