CoVid chapter 13

[capricornchanges]

I had to file chapter 13 due to the pandemic and work shutdown, how can I start rebuilding now to have aged credit when it falls off in 7 yrs. All of my credit has stopped reporting due to bk laws except for my student loans. My cars, mortgage, Loan's etc  have stopped reporting while in bk, but will start again when discharged so it will look like I have a lot of "new" debt. I need to rebuild so I have "old debt" and look more stable. Once I'm out I want to sell my home and get something I can move around in more easily as I am disabled. 

[FireMedic1]

A stipulation in Chapter 13 bankruptcy law states that you, as a debtor, are not allowed to increase any debt without receiving the permission of your bankruptcy trustee. If you do apply for a credit card, your bankruptcy payment plan will be canceled and the bankruptcy proceedings will be stopped. You should consult your attorney regarding any legal restrictions around applying for credit after declaring bankruptcy. Generally, the lender must determine whether you qualify for a particular credit card or other type of loan while the bankruptcy public record appears in your credit report.

[Anonymous]

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@capricornchanges wrote:

I had to file chapter 13 due to the pandemic and work shutdown, how can I start rebuilding now to have aged credit when it falls off in 7 yrs. All of my credit has stopped reporting due to bk laws except for my student loans. My cars, mortgage, Loan's etc  have stopped reporting while in bk, but will start again when discharged so it will look like I have a lot of "new" debt. I need to rebuild so I have "old debt" and look more stable. Once I'm out I want to sell my home and get something I can move around in more easily as I am disabled. 

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Your student loans will not get discharged (unless you have really exceptional circumstances). Once your BK gets discharged in 3 to 5 years, the student loans will come out of forbearance and be the only "old" debt you have, which will keep the age of your credit history up. I wouldn't apply for credit unless you need a new car or you're buying a house, in which case you have to talk with your attorney and get permission from the trustee. I would not get any CC's during BK.  Don't jeopardize the second chance at credit you're getting from BK because you got credit when you weren't supposed to during the plan. Work on saving up, making sure you have sound financial habits, and rebuild once you get discharged. 

[Bmac66]

I'm almost a year into my 13 and you cannot apply for any new credit while in your plan without trustee approval. Can you be an authorized user on somebody else's account. My husband is not in my plan so I'm an authorized user on his NFCU card. And they report to the credit bureaus. 

[SB_F]

I'm not sure if you can become AU w/o permission per BK 13 rules, but I inadvertently did about 2 years in for convenience on a Home Depot card, and it  helped. Never even thought about it. Was surprised to see positive credit history added every month, even though I didn't check my CR for almost a year. My theory is I am not legally responible for it, so why should the Trustee care (didn't apply for or take on credit obligations and I didn't add my name, someone else did). Trustee was a jerk (worse one ever my lawyer said), but he never checked/asked for paystubs for raises, 401K contributions, tax returns or, obviously, my CR.

AU can bite you though. I was effectively the only user of the HD card for stuff I fixed on our house, so I had control. About six months after discharge, I was added to my parents visa, as I handle all of their finances and such (banking, taxes, Rx's, Dr visits, groceries, diapers, caregivers, etc). My dad had a $4300 balance which I paid down quickly. His $9K CL and 12 yr age of the account has helped me since, but added to my three new cc w/ total CL of $4100 ($13,100 effective total CL on CR), his $4300 balance temporarily shot my utilization to 32% which was a hit to my score. That's been six months ago with now being under 9% and AZEO. Score creeping up. All over 700.  YMMV.

Less than six mo from 7 years, so on advice from here, I called TU last week and tried to get them to remove BK13 public derogatory item. They ended up making it a dispute but dropped it from my CR same day, and I got a letter from TU four days later saying the dispute resulted in the removal of the BK13. Slowly getting there. During the five years, I focused on being frugal and getting used to the payment three times what my atty said it should be. Now I have added that 4 figure amount to my monthly savings without blinking. I haven't gone crazy applying for more CC w/ big CLs. Wanting a newer car but waiting for 7 years to hit  to refi house for lower rate and substantial addition/remodel. I am starting to have patience. It pays.

[Anonymous]

I'm in a chapter 13 payment plan (3 payments in).  My lawyer/trustee approved me getting (1) secured credit card.  Please make sure to get approval in writting from your lawyer/trustee before obtaining any debt.  I had a couple of cards survive bankruptcy, if I use them, I pay in full before the statement cuts.