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Ch 13 discharge - advice?

Regular Contributor

Ch 13 discharge - advice?

I filed Ch 13 in April 2009 due to unemployment.  I had a car loan on my 2006 vehicle... everything else was unsecured debt.


I sent the trustee $1900 to pay off my case a couple weeks ago.  The Ch 13 website shows my case as "closed" as of 2/28/13. My attorney said the discharge process should be completed by the end of this month.


That being said... what should I do to start rebuilding?  I owe on the 2006 vehicle with no other debts.  My EQ score stands at 652.  I have $5000 in savings with stable employment for the last 3 years.


I've given some thought to a new car.  My 2006 vehicle has 103k miles with a KBB trade value of $4000... my loan balance is $2800.  Do I stand a realistic chance of trading it and getting something new financed?  


I've seen the lists of best credit cards to go after when you get your discharge... but again... I'm kinda nervous about applying right after a discharge.  Should I go for it or wait?


Any advice appreciated!  I'm anxiously awaiting my discharge paperwork!

Message 1 of 23
Valued Contributor

Re: Ch 13 discharge - advice?

What condition is your car in?  I wouldn't make replacing it the first priority unless you feel you're on "borrowed time".


You can get a score bump by maintaining two or three bank cards (VISA, MC, AMEX, Discover logo cards).  Be sure you keep utilization below 10% and only let "less than half" the cards show a balance on their reporting date.  You can manage reporting by paying before the cutoff to take the balance to zero.


I would start with your bank or CU.  Go to the branch and ask what they can do for you.  Discuss your situation and don't let them do a credit pull unless they convince you they'll be able to help.  If you're eligible, pursue NFCU.  You should be able to get a Cap1 unsecured card.  Try for a Best Buy Rewards Mastercard or a Walmart Discover card.


If you can't get two unsecured cards, I'd use some of your savings to secure one or two cards. 


I was a BK7 and started about 100 points below you at discharge.  I didn't even ask NFCU for unsecured credit, but did a secured card and installment loan.  My mistake was taking two high fee cards - First Premier and CreditOne, don't do that. 


If your car is in reasonable shape drive it another year, you'll be able to get a good rate on another then if you work the credit cards.

BK7 Filed 8/11/2009 Discharged 11/23/2009. Purchased new home 4/11/2012
Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
Current Score: 11/06/2013 EQ 708 11/06/2013 EX 702 11/16/2013 702 11/06/2013 TU 729
Goal Score: EQ 740 EX 740 TU 740
Take the FICO Fitness Challenge
Message 2 of 23
Regular Contributor

Re: Ch 13 discharge - advice?

Thanks for the response.


My car is in good condition.  I don't feel as if I am on borrowed time although it is due for the timing belt/water pump maintenance... that job itself is $1200-$1600 or so due to the labor involved.  Basically I just need to decide if I want to to invest in this vehicle for the long haul or get something new.


As far as credit cards... I had planned to get just one and go from there.  I learned my lesson years ago with 5-6 credit cards and I won't be doing that again.  


Buying a house is something I want to do eventually... but not right now.  For now I just want to start slow and work my way back up... I really would like to get a new vehicle but the one I have is fine too.  I could keep it... pay it off and continue to save.

Message 3 of 23

Re: Ch 13 discharge - advice?

You should have no problem. Might get a little high interest rate, but 2 weeks after I got my discharge papers I went and bought a 20k truck with 8.9% rate. I got approved by several lenders, but I was in the same situation, had a very old vehicle that was running but on its last leg.

Message 4 of 23
Regular Contributor

Re: Ch 13 discharge - advice?

Thanks for the response.


As of today I'm still waiting on my discharge.  I'm keeping an eye on the court website for the documents to be posted electronically.  Smiley Happy

Message 5 of 23

Re: Ch 13 discharge - advice?

Did you have to send a notice to the trustee where the payoff money came from? I also filed ch 13 in 2009 and would like to send a payoff as well.
Message 6 of 23
Regular Contributor

Re: Ch 13 discharge - advice?

Not sure what you mean... I just decided I got tired of paying $127 a month when my balance was only $1900 so I just sent the payoff amount.

As for my discharge... It's still pending. The "30 days to object" was sent to creditors on 4/5 and I got a notice saying if no objections I will get my discharge within 14 days...

So on or around May 19th...
Message 7 of 23

Re: Ch 13 discharge - advice?

I have read that if the trustee sees that you have extra money lying around (disposable income) they will increase your plan payments if you are not paying at 100%.

I have learned my lesson and now have a good savings to fall back on. I just want to pay it off (~$1500) and move on with my life...refinance my house, car, etc...I am just afraid that it will be a red flag to the trustee.
Message 8 of 23
Regular Contributor

Re: Ch 13 discharge - advice?

How could they do that? Does the trustee have access to your bank account?

I filed in 2009 and had a 250 payment... I paid the trustee directly each month. I was taking home about 500 a week. Then I was laid off and drawing 330 a week UI. My attorney got my payment reduced to 125 a month.

I moved across the country for a new job taking home 900 a week. My payment remained 125 a month even though I was making 3x the money.

If you have a payroll deduction I guess they could increase your payment based on an income increase but that never applied to me because I paid the trustee directly.

That would be the only way as I see it. The trustee shouldn't have your account balances.
Message 9 of 23
Valued Member

Re: Ch 13 discharge - advice?

Hello there,


It's my hub's story, I want to share in case it helps or I can get helped Smiley Happy


 The case was closed end of Jan 2013 and we didn't get the discharge paper until recently when he went to meet his lawyer.  So now we have the discharge paper in hand and we are in borrowed time.  We already tried to finance at dealer once and got denied from its own fianance ( it is tough so it's not a surprise), reason is that the BK is too recent.  Dealer promised to work on fiancing part and adviced us to work on our local banks.  I know that our first choice is CU but we decided to put it aside since his current car was IIB eventhough market value and interested were paid off. 


If you believe the case is closed and want to have the paper in hand, I would recommend you to make appointment with your lawyer.  I am the one who requested my husband to go to meet his lawyer and I believed that it is part fo the service to have a semi meeting with his lawyer after expected closing case period.  His lawyer printed out everything that my husband needs to have in hand and the lawyer recommend us to let the dealer help us to find the loan.



Message 10 of 23