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Credit Reporting after Chapter 13

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Anonymous
Not applicable

Re: Credit Reporting after Chapter 13

@matt14  It does suck. I hope to refinance in a couple of years or as soon as I can possibly refinance 

 

@Anonymous my car loan wasn't reporting so I refinanced it thinking it'll report. I refinanced last month and my first payment is due on the 9th. I'm hoping it'll report because I need a credit mix. 

Message 21 of 33
Anonymous
Not applicable

Re: Credit Reporting after Chapter 13

@Anonymous - Has your note reported as of yet?

Message 22 of 33
Anonymous
Not applicable

Re: Credit Reporting after Chapter 13

@Anonymous  No ;-(

Message 23 of 33
Anonymous
Not applicable

Re: Credit Reporting after Chapter 13

@Anonymous i got an email just now from Experian.com and alerted me that I have a new account (capital one auto.) so it's now reporting. 

Message 24 of 33
Anonymous
Not applicable

Re: Credit Reporting after Chapter 13

@Anonymous - OUTSTANDING! Now to work on getting your mortgage to report!!

Message 25 of 33
matt14
Established Member

Re: Credit Reporting after Chapter 13

@Anonymous that's awesome. Having that credit mix is so important.

Message 26 of 33
Anonymous
Not applicable

Re: Credit Reporting after Chapter 13

@Anonymous I think for that I would have to refi. I'm not in a position to refi since working for the state, we've been furloughed and salary cut by 10% 😭

 

@matt14 i hope it'll help! 

Message 27 of 33
SB_F
Contributor

Re: Credit Reporting after Chapter 13


@sarge12 wrote:

@matt14 wrote:

Hello everyone,

 

Hopefully someone has had this experience and could provide some insight. I have a couple of questions regarding how debts are reported after a Chapter 13 plan is complete and accounts falling off after filing.

 

A little background, i filed Chapter 13 in November 2019. All of my accounts are now updated on my credit report showing 0 balances with the note 'wage earner plan'. My home(2nd mortgage only) and car are both set to get paid out in the plan. I have a 1st and 2nd mortgage of which I pay the 1st mortgage outside of the plan and the 2nd (which was a balloon) is set to be paid off under the plan.

 

My questions:

1. Will my 1st mortgage balance/payments ever show on my credit since i am technically still paying them outside of the plan?

2. I also have 2 student loans that are showing 0 balances but are not included in my plan. Will these start to report again (with the balance) once i have completed my 5 year payment plan?

3. Is it normal for accounts(credit cards) to be removed from a credit proile after the Ch 13 filing? (I had several Synchrony accounts to be removed from all 3 of my credit reports) and will they ever come back?


To answer question #1, it depends on whether you have reaffirmed the debt, or are just keeping the payments up to date. All legal responsibility for debts cease when BK is filed and debt is discharged. That is at least the case with chapter 7. Some lenders require a reaffirmation, which is like a new debt, but in either case BK does not cancel any liens. Non-reaffirmed debt that is continuing to be paid will not show new payments good or bad, as the debt itself is no longer enforcable, but the valid lein can be executed in foreclosure. As for question 3, the credit card issuers are required by law to indicate that the debt was included in bankruptcy, if they report it at all. Some might find it easier to just not continue to report it. With the bankruptcy on the report there is little if any effect from debts before the bankruptcy anyway. Everything I just said is true for chapter 7 in most States, but I am not really sure it all holds true for chapter 13. You can usually keep your house and car with either chapter provided the equity in the house does not exceed the legal exemptions for chapter 7. Neither chapter will discharge student loan debt, but I do not know how it is handled on credit reports. I know that sometimes a chapter 13 is filed solely because the equity in a house exceeds the chapter 7 exemptions, which would require the debtor to sell the property to pay the creditors. Sometimes the debtor may have too much income to qualify as well, because chapter 7 requires a means test, where chapter 13 does not. If the lender of debt secured with a house or car does not require a re-affirmation agreement, it is nearly always better not to sign one, especially on a car. You will not receive the title to either until the lein is satisfied, but if not reaffirmed, but still retained, and later the engine blows up, you can let it go without a repo showing on your credit report. If discharged in bankruptcy, and not reaffirmed, the vehicle can be reposessed due to the lein, or surrendered by the debtor with no affect on your credit report at all. That is because the debt itself was discharged so the debtor is not legally liable for the debt. The lein is still enforcible though, but it is rare in most States for the lender to repossess the car if not delinquint. If reaffirmed there is a new debt on the car, and that debt and any defecit that it incurs will be enforcable by law, just like any other post bankruptcy debts. At the very least, be sure the property is worth more than is owed on it before reaffirming the debt. Otherwise you could 2 weeks later total the car, and you will be legally liable for the deficit when the insurance fails to cover the lein.


@matt14 

My BK13 played out much like sarge12 described for BK7. Filed 11/13, discharged 7/19 waiting to disappear 11/20 (just realized 100 days from today!) so I can then refi.

 

#1. I did not reaffirm mortgage and continued to pay. Citi was third or fourth owner of mortgage when I filed. They immediately sold it to Ditech who kept it until the month of discharge when it was sold to NewRes. Upon discharge, Citi and Ditech showed up immediately on CR followed shortly by NewRes. That's the good news with the long history since 7/03. Bad news is Citi and Ditech showed as IIB Ch 13 (apparently correctly labeled even though it was listed but not included or reaffirmed in BK13). I see complaints on here about NewRes, but they are reporting correctly for me without BK mention. After Ditech ironically went BK recently, it disppeared from TU and changed to listing as perfect on EX and EQ, which is good as you now can't get them to answer the phones or respond in any other way. Citi still lists IIB BK13 on EX and EQ but totally dropped off of TU last month.

 

#2. Had paid my SL off years ago. Sold my first house to relocate to another state. Sucked it up and paid SL off with some of equity. One of the smartest thing I ever did.

 

#3. All cards and only CU LOC were IIB and closed, but only the cards with zero balance going in are on the CRs at all. Several  $10-40K are no where to be seen Smiley Happy. The CU LOC remains on on all three CRs but mysteriously last week switched from IIB to a charge off on EX effective 7/19, the month of the discharge last year. My EX FICO score just jumped 17 points last week and then 5 more points two days later (total 25 per $1, seven day trial on creditchecktotal.com, EX 722, TU 734, EQ 734), so maybe charge off is better than a BK13 for scoring purposes? I do know an 18 mo old CO will not fly for a mainstream mortgage, so I disputed it. My hopes are they realize the mistake when pointed out, and with only 3 mo to go, they just drop it off rather than bother correcting it.

 

Other thoughts:

Kind of like on the first day of engineering school, they tell you to look left and right and know that two of you will change majors before the semester is over and count the next two, and two of the three of you will never graduate. Well, that was very true, but there was no doubt in my mind I would make it. I was kind of like that on completing BK13, but I really had no idea of how small the sucess rate is - less than 33% by many accounts. I never assumed I had any chance of failure. Partly because I had a lot of equity in my house (which BK judge and trustee ignored state limits on as seems to be norm here in my state) and mainly because my biggest reason for filing was $100K + in Fed and state taxes including business withholding and sales tax that wouldn't go away ever without BK13 repayment. My business had failed while my wife and daughter were sick and hospitalized over 100 days in the year tax delinquency started. In fact, my atty was grilling me at first meeting about specific dates, and I realized I missed my first quarterly witholding payments on the day my wife died. Only missed three months WH and maybe five months of sales tax, but penalties and interest made it a mountain in a few years (so don't do that kids - skip your mortgage and put your kids on a bread and water diet before you skip taxes, especially witholding and sales tax - those $$$ are other peoples taxes being paid, not yours so not forgiveable). Find a way to complete the BK13 no matter what. It is worth it for reduced stress levels if nothing else (well still not owing banks and govt is nice too).

 

Watch the discharge progress. Mine took seven months after the last payment, and now I learned that many banks and mortgage companies won't touch me until 6/21 even though everything disappears from my credit report soon in 11/20. In the end, my atty did a great job of eliminating much of WH and sales taxes due which is supposedly as impossible as getting out of student loans. Hated the delay but can't argue with the results. Not sure what I could have done differently with the same results, but watch for petty delays. Trustee was very slow on everything.

 

Per recommnedations on here, I asked TU for EE at six months shy of 7 years. Got it within a couple of hours. Was about to ask EX, but it popped off last week at 3 1/2 months out. Have heard EX won't EE until one month out. Not sure it really matters as Citi is still showing as IIB on EX and EQ prob until the end. Also CU LOC IIB is still there and they were nasty last year when I disputed a couple of things.

 

Sorry for what is probably TMI, but I hope that something here helps you somehow. Not nearly as much good BK13 info on this site as BK7, even though the process is a whole lot more complicated and drawn out.

 

Good luck!

BK13 filed 11/2013 discharged 6/2019
Oct 2019 EQ 672 TU 643 EX 663
Julu 2021 EQ 840 TU 828 EX 819
Message 28 of 33
sarge12
Senior Contributor

Re: Credit Reporting after Chapter 13


@SB_F wrote:

@sarge12 wrote:

@matt14 wrote:

Hello everyone,

 

Hopefully someone has had this experience and could provide some insight. I have a couple of questions regarding how debts are reported after a Chapter 13 plan is complete and accounts falling off after filing.

 

A little background, i filed Chapter 13 in November 2019. All of my accounts are now updated on my credit report showing 0 balances with the note 'wage earner plan'. My home(2nd mortgage only) and car are both set to get paid out in the plan. I have a 1st and 2nd mortgage of which I pay the 1st mortgage outside of the plan and the 2nd (which was a balloon) is set to be paid off under the plan.

 

My questions:

1. Will my 1st mortgage balance/payments ever show on my credit since i am technically still paying them outside of the plan?

2. I also have 2 student loans that are showing 0 balances but are not included in my plan. Will these start to report again (with the balance) once i have completed my 5 year payment plan?

3. Is it normal for accounts(credit cards) to be removed from a credit proile after the Ch 13 filing? (I had several Synchrony accounts to be removed from all 3 of my credit reports) and will they ever come back?


To answer question #1, it depends on whether you have reaffirmed the debt, or are just keeping the payments up to date. All legal responsibility for debts cease when BK is filed and debt is discharged. That is at least the case with chapter 7. Some lenders require a reaffirmation, which is like a new debt, but in either case BK does not cancel any liens. Non-reaffirmed debt that is continuing to be paid will not show new payments good or bad, as the debt itself is no longer enforcable, but the valid lein can be executed in foreclosure. As for question 3, the credit card issuers are required by law to indicate that the debt was included in bankruptcy, if they report it at all. Some might find it easier to just not continue to report it. With the bankruptcy on the report there is little if any effect from debts before the bankruptcy anyway. Everything I just said is true for chapter 7 in most States, but I am not really sure it all holds true for chapter 13. You can usually keep your house and car with either chapter provided the equity in the house does not exceed the legal exemptions for chapter 7. Neither chapter will discharge student loan debt, but I do not know how it is handled on credit reports. I know that sometimes a chapter 13 is filed solely because the equity in a house exceeds the chapter 7 exemptions, which would require the debtor to sell the property to pay the creditors. Sometimes the debtor may have too much income to qualify as well, because chapter 7 requires a means test, where chapter 13 does not. If the lender of debt secured with a house or car does not require a re-affirmation agreement, it is nearly always better not to sign one, especially on a car. You will not receive the title to either until the lein is satisfied, but if not reaffirmed, but still retained, and later the engine blows up, you can let it go without a repo showing on your credit report. If discharged in bankruptcy, and not reaffirmed, the vehicle can be reposessed due to the lein, or surrendered by the debtor with no affect on your credit report at all. That is because the debt itself was discharged so the debtor is not legally liable for the debt. The lein is still enforcible though, but it is rare in most States for the lender to repossess the car if not delinquint. If reaffirmed there is a new debt on the car, and that debt and any defecit that it incurs will be enforcable by law, just like any other post bankruptcy debts. At the very least, be sure the property is worth more than is owed on it before reaffirming the debt. Otherwise you could 2 weeks later total the car, and you will be legally liable for the deficit when the insurance fails to cover the lein.


@matt14 

My BK13 played out much like sarge12 described for BK7. Filed 11/13, discharged 7/19 waiting to disappear 11/20 (just realized 100 days from today!) so I can then refi.

 

#1. I did not reaffirm mortgage and continued to pay. Citi was third or fourth owner of mortgage when I filed. They immediately sold it to Ditech who kept it until the month of discharge when it was sold to NewRes. Upon discharge, Citi and Ditech showed up immediately on CR followed shortly by NewRes. That's the good news with the long history since 7/03. Bad news is Citi and Ditech showed as IIB Ch 13 (apparently correctly labeled even though it was listed but not included or reaffirmed in BK13). I see complaints on here about NewRes, but they are reporting correctly for me without BK mention. After Ditech ironically went BK recently, it disppeared from TU and changed to listing as perfect on EX and EQ, which is good as you now can't get them to answer the phones or respond in any other way. Citi still lists IIB BK13 on EX and EQ but totally dropped off of TU last month.

 

#2. Had paid my SL off years ago. Sold my first house to relocate to another state. Sucked it up and paid SL off with some of equity. One of the smartest thing I ever did.

 

#3. All cards and only CU LOC were IIB and closed, but only the cards with zero balance going in are on the CRs at all. Several  $10-40K are no where to be seen Smiley Happy. The CU LOC remains on on all three CRs but mysteriously last week switched from IIB to a charge off on EX effective 7/19, the month of the discharge last year. My EX FICO score just jumped 17 points last week and then 5 more points two days later (total 25 per $1, seven day trial on creditchecktotal.com, EX 722, TU 734, EQ 734), so maybe charge off is better than a BK13 for scoring purposes? I do know an 18 mo old CO will not fly for a mainstream mortgage, so I disputed it. My hopes are they realize the mistake when pointed out, and with only 3 mo to go, they just drop it off rather than bother correcting it.

 

Other thoughts:

Kind of like on the first day of engineering school, they tell you to look left and right and know that two of you will change majors before the semester is over and count the next two, and two of the three of you will never graduate. Well, that was very true, but there was no doubt in my mind I would make it. I was kind of like that on completing BK13, but I really had no idea of how small the sucess rate is - less than 33% by many accounts. I never assumed I had any chance of failure. Partly because I had a lot of equity in my house (which BK judge and trustee ignored state limits on as seems to be norm here in my state) and mainly because my biggest reason for filing was $100K + in Fed and state taxes including business withholding and sales tax that wouldn't go away ever without BK13 repayment. My business had failed while my wife and daughter were sick and hospitalized over 100 days in the year tax delinquency started. In fact, my atty was grilling me at first meeting about specific dates, and I realized I missed my first quarterly witholding payments on the day my wife died. Only missed three months WH and maybe five months of sales tax, but penalties and interest made it a mountain in a few years (so don't do that kids - skip your mortgage and put your kids on a bread and water diet before you skip taxes, especially witholding and sales tax - those $$$ are other peoples taxes being paid, not yours so not forgiveable). Find a way to complete the BK13 no matter what. It is worth it for reduced stress levels if nothing else (well still not owing banks and govt is nice too).

 

Watch the discharge progress. Mine took seven months after the last payment, and now I learned that many banks and mortgage companies won't touch me until 6/21 even though everything disappears from my credit report soon in 11/20. In the end, my atty did a great job of eliminating much of WH and sales taxes due which is supposedly as impossible as getting out of student loans. Hated the delay but can't argue with the results. Not sure what I could have done differently with the same results, but watch for petty delays. Trustee was very slow on everything.

 

Per recommnedations on here, I asked TU for EE at six months shy of 7 years. Got it within a couple of hours. Was about to ask EX, but it popped off last week at 3 1/2 months out. Have heard EX won't EE until one month out. Not sure it really matters as Citi is still showing as IIB on EX and EQ prob until the end. Also CU LOC IIB is still there and they were nasty last year when I disputed a couple of things.

 

Sorry for what is probably TMI, but I hope that something here helps you somehow. Not nearly as much good BK13 info on this site as BK7, even though the process is a whole lot more complicated and drawn out.

 

Good luck!


Chapter 7 would discharge mortgage loans, but liens would still be valid and enforceable. In a chapter 13, the mortgage can usually be paid outside the bankruptcy, so the debt will not be included in bankruptcy. One of the main reasons many opt to keep their house or land, and if the equity in a house exceeds the exclusion amount, the house would have to be sold to apply to the debts. In chapter 13, the amount of equity in a house is not under those debt exclusion amounts. In chapter 7, to keep the house with too much equity for the exclusions in that State, would require the debtor to pay the creditors an amount equal to the amount your equity exceeds the exclusions, at least that is my understanding. Chapter 7 also has a means test for income. If filing chapter 13, the mortgage can be kept by maintaining the payments, and all payment history would continue. The 2 lenders who sold the mortgage would have to put the included in bankruptcy comment in because the lien on the asset was transferred to the new mortgage lender, which should not say included in bankruptcy. In chapter 7 all debts suject to inclusion in a bankruptcy will be discharged, including a mortgage, but bankruptcy does not cancel liens, so if not paid the lender can use the lien to take the asset. In a chapter 13 that has a mortgage being paid outside of the debt repayment plan, the original mortgage agreement is still in effect. All of this is true to the best of my knowledge, but if someone else knows better, please correct me because I do not want to lead anyone wrong.

TU fico08=812 07/16/23
EX fico08=809 07/16/23
EQ fico09=812 07/16/23
EX fico09=821 07/16/23
EQ fico bankcard08=832 07/16/23
TU Fico Bankcard 08=840 07/16/23
EQ NG1 fico=802 04/17/21
EQ Resilience index score=58 03/09/21
Unknown score from EX=784 used by Cap1 07/10/20
Message 29 of 33
sarge12
Senior Contributor

Re: Credit Reporting after Chapter 13

@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.

TU fico08=812 07/16/23
EX fico08=809 07/16/23
EQ fico09=812 07/16/23
EX fico09=821 07/16/23
EQ fico bankcard08=832 07/16/23
TU Fico Bankcard 08=840 07/16/23
EQ NG1 fico=802 04/17/21
EQ Resilience index score=58 03/09/21
Unknown score from EX=784 used by Cap1 07/10/20
Message 30 of 33
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