Credit Reporting after Chapter 13

[SB_F]

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@sarge12 wrote:

@SB_F Since that last post is almost contradictory to my earlier post, I obviously had forgotten the difference between chapter 7 and chapter 13 in how mortgages are handled. I think the most recent post is correct, but I am not 100%. First, bankruptcy laws differ between States, especially in exclusion amounts...Second, bankruptcy laws change alot. Third, even in a chapter 13 there are limits to how much equity you can have in a house while still entering a chapter 13 repayment plan, but it is a fairly high amount from what I read. I think if a lot of equity is in a house when filing a chapter 13, it can result in a chapter 13 repayment plan including the amount over the chapter 7 exclusions in chapter 13 payments. The logic in that is with a chapter 7 the lenders would be paid some of their debt if a chapter 7 had been filed, by selling the house. Bankruptcy law is somewhat complicated. I have heard of some people filing without hiring an attorney, but I would come about as close to doing surgery on myself.

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Makes sense. According to my atty, at least in my state, the judge and trustee really do not want to go for the liquidation of a house, and they allow a lot of leeway for the filer. Forced selling has many likely pitfalls and no guaranteed amount of equity to divert to creditors after all of the trustee's effort to sell. This includes using liberal fire sale values, closing costs and realtor fees. My lot is worth quite a bit but the house itself is not, and if sold the house would likely be torn down for a bigger house. But my house needed new everything (roof, paint, windows, elect, kitchen, baths, etc.), so the sumitted value reflected someone having to pay for all of that work (which someone might reasonably do). Judge/trustee accepted that value.

Now if I can just get through the next few months and refi to get rid of that 5.85% APR mortgage!

[matt14]

Thanks for your input. I am 9 months into my 5 years so i have time to see how things play out :-).

[JP1968]

I am a little late to this conversation, but can provide some insight on what has happened to me in the past few days.  I was officially DC from Ch. 13 on 11/18/2020.  In October I paid for a FICO membership so I could watch as things changed.  My mortgage, previous car loan (paid off in BK), and student loans had disappeared from my reports during my BK. I did obtain a car loan Fall 2019 as my car was totaled, and that loan did show from day 1.  Prior to BK: I did not have much debt had just fallen behind on car and mortgage.

The week of Oct 11th:  TU-590, EQ-648, EX-658 (38 point boot from joining Experian Boost)

On 11/19/20 those lines mentioned above (also Capital 1) started populating back sayiing updated and showing $0 balances.

On 11/20/20  the bankruptcy was updated (bankruptcy filed 1 to 0 and then bankruptcy discharged 0 to 1) 

On 11/22/20 the mortgage balance appeared and one negative dropped off. Score raised 17 points ( now 607)

Today, 11/23/20 the mortgage balance appeared on Equifax. Score raised 15 points (now 663)

I am an authorized user on some of my Dad's A+ credit, so maybe a reason my scores aren't too bad.  The auto loan I obtained was only at 5% through Drivetime/Bridgecrest Financial, which was awesome!

I want to refinance my house at these all time low rates, but not sure I will be able to.  Not sure what my first steps will be to start working my way up. That's why I am looking through these threads.  Hope my experience helps you.  I had wondered how it all would work out myself.  The good thing is...my scores actually went up when they posted, that was my big worry. I didn't want to take another dive.