Advice Needed From Community Members

[LifeIsAHighway]

"Hey" to everyone. I'm a long-time lurker but this is my 1st time posting. I'd like to preface my post by saying that the myFICO Forums are a wealth of information & that there are some amazing people taking the time to help others. Thank you to all those who contribute.

I'll give you a brief overview of my situation (the full version would be a novel). I'm a 47 yr old, single male who is medically retired. Thus, my entire income is nontaxable. I purchased a house 3 yrs ago & my payment includes escrow (property taxes & insurance). My house pmt is 27% of my monthly income. Soon after purchasing my house, I underwent an unplanned surgery. This was the beginning of the end for me from a financial perspective. Medical bills mounted &, trying to be responsible (but being foolish in hindsight), I paid them with credit cards. In the early fall of 2017, it became too much so I stopped paying all creditors other than my house payment. My credit accounts, one by one, charged-off but no creditor came after me with legal action.

As much as I didn't want to, I filed Ch7 BK on 10/29/2018. ALL debt, other than my house, was unsecured. The 341 meeting was held on 11/29/2018 & I reaffirmed on my mortgage but wiped the slate clean otherwise. My anticipated date of discharge is around 01/28/2019. I am a member of NFCU but had no credit accts/debt with them when I filed. My gameplan was to wait until discharge, get a secured CC with NFCU & begin to rebuild. The only debt I have now (or will have upon discharge) is my house pmt so I'm back in a position of basically 27% DTI. Since purchasing my house, I have never had a late or missed pmt so it reflects on all 3 credit bureaus as a perfect pmt history.

Now to my dilemma. In my Ch7 I burned CapOne on 2 CCs, a Venture card & a Quicksilver card, for a total of around $11k. Both of those accts were charged-off on 11/05/2017. CapOne has already $0 out the bal & marked the accts as "Included in Ch7" on all 3 credit bureaus. Today, just out of curiousity, I went to CapOne's prequal site & expected my laptop screen to just fill with a huge "LOL!". To my surprise, still 54 days short of discharge, the CapOne site prequalified me for both an unsecured Platinum card & a QuicksilverOne card. After my initial shock, I contacted my attorney & asked if I should take this opportunity to begin rebuilding now or do nothing until after discharge. She advised that there is absolutely nothing illegal, immoral, unethical, etc about accepting the offers. I questioned if the BK Trustee, or another creditor, might use these potential new lines of credit against me & have an impact on my discharge. My attorney told me, "Absolutely not...nothing to worry about".

So, to all of you who have been patient & gracious enough to read my lengthy post, I ask, "What would you do?". I'm open to any & all feedback. I would love to start rebuilding asap, especially without having to get a secured CC. However, I'm hesitant to jump too quickly.

Thank you in advance to anyone who responds & I wish each of you an early Merry Christmas.

[Anonymous]

I don't know if this will help at all but just to give you my own recent experience with CapOne. Up until last month I had a collection from CapOne for a credit card and I owed them 2,992 and while they wouldn't approve me for an unsecured card they did give me a secured card. I only had to pay 49 dollars for a 200 dollar limit. They approved this while still having the 2,992 collection on all 3 of my credit reports. The collection is gone from all 3 agencies now but the last collection was just removed from TransUnion and last night CapOne approved me for an auto loan. They financed an auto loan for just over 15,000 less than 30 days after the collection was removed and I had all 3 agencies remove the collection early so it seems CapOne is pretty forgiving.

Now I know you owed them a lot more money but if you did prequalify I would say go for it. Your limit might not be that high to start with but it seems CapOne is willing to give people a second chance. Again, they allowed me to finance a brand new vehicle without even putting money down, which shocked me considering my history with them.

Again, not sure if this helps, just wanted to share.

[LifeIsAHighway]

Thanks NotYou007. I was beginning to think that maybe I should have posted my question under "Bankruptcy" or kept my post shorter since no one had responded. I tend to get "wordy" when I write/text/etc. LOL! I appreciate you sharing your experience with CapOne. Congrats on getting approved on a new car!!! I have read many comments on the myFICO forums that they are pretty forgiving. I just wasn't expecting a prequal after burning them for so much $$$...& so soon. Now I just have to decide if I want to wait until after my BK is discharged or grab the offer on the platinum card while it's out there. Thanks again for your input.

[FireMedic1]

I would hold off on applying. Cap1 may have recieved the documents that they got burned by now. But your not DC'ed yet and your credit reports dont reflect it. Yes they are forgiving. But the majority get in after 1 year. Few slip thru the cracks before hand. But its a triple pull as you know. I've been saying it on here for a few years. Let the BK run its course and finalize. Then wait a few months for all the updates after BK reflect on your CR's. You dont want to look desparate to other creditors. Then start the rebuild. Let the one door close before the other one opens up. Its a roll the dice situation. But I believe they will deny you.

[Jnbmom]

I agree with FireMedic1, I would wait until your BK is discharged and your reports reflect everything accurately. People sometimes are in too much in a hurry to get cards quickly again. I would wait til after your BK closes. Yes Cap1 is forgiving , you may very well get back in with them and then you can look the secured route and slowly rebuild.

[LifeIsAHighway]

Thank you @FireMedic1 & @Jnbmom. I sincerely appreciate your comments & plan to follow your advice. Yesterday, I guess I just got caught up in the moment that CapOne was willing to "potentially" let me back in so soon. I'm going to avoid prequal sites, let the dust settle from my BK & begin the process of rebuilding after my BK discharge. I'm sure there will be many changes to my 3 bureau reports over the next few months. I currently have no need for credit but just want to take the correct steps to rebuild in a way that best benefits me. It's baby steps, which is hard for me because I'm an impatient person. However, time heals all wounds. So...I guess I'm gardening, with just my mortgage, until the right time & the right offers come my way. Thanks again for your input. HAPPY HOLIDAYS!!!

[Guyatthebeach]

LifeIsAHighway,

It's been seven years since I filed chapter 7, I Navy Federal has helped me a great bit with my credit rebuild. 

First thing is don't apply for anything until after your bankruptcy is disharged. I have a friend that had his bankruptcy dismissed because he applied and was approved for credit during his waiting period for discharge. 

Second, since you bank with NFCU, I would definitely apply with them first for an unsecured card . If it's declined, they should counter offer with a secured card. If they don't counter offer, they may make you apply again for the secured version. Take it and use it wisely and it will graduate to an unsecured card in time.  The next thing I would with Navy Federal is get a secured loan for $1000 for a 12 month term. The reasons you are doing this are to add an additional trade line to your credit report post bankruptcy, demonstrate you can handle mortgage, credit card, and loan debt,  and show perfect payment history.  At this point, you will have your mortgage, credit card, and loan reporting post bankruptcy.

After your credit report is updating with 6 months of positive payment history, try the Capital One website for preapprovals. If there is a preapproval, take it. If not look at Discover for a preapproval and take what they offer.

You can also use Soulmaster's guide to 720 in 24 months as a template. For now why you are waiting, I would start saving money for that secured loan/credit card and start an emergency fund. 

It took me years to rebuild. I know if I can do, so can you.  Let us know how you do. 

Guyatthebeach