Going to File Ch 7 BK - Some Questions

[CH-7-Mission-Accomplished]

I don't have time to answer all of your questions, but please listen to this advice:

CLOSE all those zero balance open credit cards or they will be treated as included in bankruptcy, even with a zero balance and you will be locked out for many years or forever.   So if these cards have a zero balance, close them and the credit report will say "closed at consmer's request" and not "included in bankruptcy.

Close:  I have cards with zero balances from Discover, NFCU, AMEX, Target, Macys, Dillards and Capital One that will not be burned. 

[CaptainConcorde]

OK that makes sense.  Thank you!

[righthererightnow]

I posted this on another thread recently.... but.. had to say it again here. Capital One is suuuuuuper forgiving. They took me back six months after BK (and they were part of my BK). I would say give it six months, and see.

See also: this thread:
https://ficoforums.myfico.com/t5/Bankruptcy/Bankruptcy-Friendly-Credit-Cards-Pt-2/td-p/3999737

[rosco75]

I will repeat what someone above said - close the zero balance cards prior to filing. As far as your questions about which cards and when - some secured cards will actually deny you. Its kinda crazy, so just be aware of that. All it takes is one card after the discharge to get the ball rolling. Do not get more than one or two secured cards. You are in perfect position for a cap1 QS card after discharge. Mine was approved about 5 months after my discharge date. And a 3k limit. They are super BK friendly, especially if you didnt burn them. 

There are other no AF cards that are BK friendly and will approve you around the 6 month mark. My two favorites are Ollo and Mission Lane. 

About a year and a half past BK I was finally able to get a Discover IT card. When I got the approvals for the ML/Ollo cards I used the preapproval tool on the discover site and was not preapproved. I used that as my measure, and as I said one day about 1.5 years after I was suddenly preapproved and pulled the trigger and got it. YMMV but I would say with absolute certinity based on personal experience and my vast reading on these boards because of my own BK that this is what works the best and quickest. My FICO's went from 700's to about 520 and then 6 months post discharge I was already hitting 600. 2 years post BK and my FICO 8's ride the high 600's but I feel like they just wont budge farther until the BK ages more. 

AMEX will not touch you till 5 years and 1 month post discharge unless you burn them then you may as well just forget them as it could be 10+ years before they will work with you. Chase is also not BK friendly, they like 5 years as well. Stick to the above and you will be back up there in no time. 

You can also see this thread for some good options on BK friendly cards:

https://ficoforums.myfico.com/t5/Bankruptcy/Bankruptcy-Friendly-Credit-Cards-Pt-2/td-p/3999737

[CaptainConcorde]

Thank you all for the advice.  I will plan on closing the zero cards and will look at a CapOne QS and one other no AF secured card three months post DC.  Then I will look at Discover at 18 months post DC.  AMEX I will plan on 5+ years then (that's life)   

I'm going to try to find a good BK attorney next week to see.  I'm looking at three months to filing so I have time to make a good plan.

Honestly I'm still searching for a way to not file.  I guess it's just scary.

[Shooting-For-800]

You will probably lose your savings in Ch7 if it is not in 401k.

I would pay off banks you want later if the amounts are right.

Have you thought about settling instead of BK?

With thorough negotiations, you should be able to settle for 30-60% of your balances.

[CaptainConcorde]

"Have you thought about settling instead of BK?

With thorough negotiations, you should be able to settle for 30-60% of your balances."

I'm honestly not sure how to do this.  I've read so many horror stories about these debt settlement companies I'm wary of them.  I'm sure the hit to my fico score would be dramatic too assuming they're charged off.  

[SUPERSQUID]

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@CaptainConcorde wrote:

Long Post - Sorry.  I did read many pages of posts and found some answers to some other questions.  Any help & wisdom would be appreciated.

I may have to file Chapter 7 if I can't find a way out of this mess.   I'll qualify for Chapter 7 because all my income now is not used for means testing (SSDI and VA 100% disability). I had to retire last year due to worsening health. I went thru my meager retirement savings early on and now am working on my emergency savings but it's like a boat with a slow leak... I'll sink in the end.

My total credit card debt is nearly $100k. I'm current on everything now but just making minimum payments and a little extra each month. It would take forever to pay it off. Selling my home and moving isn't an option for me (I moved here last year for health reasons). My current scores are around 700 with utilization around 38% and I haven't had a late payment in 20+ years. I have around $260k in credit line on my cards. Before retirement I had a great six figure job and was doing fine but a year off work, health expenses with no coverage before my VA kicked in, plenty of bad decisions on my part, and life in general, well now BK is the only realistic option. I did try credit counseling and the Dave Ramsey course and it just convinced me I'll never catch up.

I'll be burning the big banks (Citi, Chase, Barclay, US Bank, Wells Fargo, USAA). I have cards with zero balances from Discover, NFCU, AMEX, Target, Macys, Dillards and Capital One that will not be burned. I know all my cards will be closed once I file and my score will drop into the 500s so I have some rebuilding plans to make. I plan to reaffirm my mortgage ($2500) and my car ($550) and put everything else in the BK. My take home income with my disability payments is around $6k a month so once discharged I'll have around $2950 a month for utilities, groceries, dental insurance, etc. I'll be able to put money toward three secured credit cards (revolving) to start rebuilding with. My plan is to use each one then immediately pay it off before the statement even hits keeping the balances at $0 while leaving one with a small balance (AZBO). My goal is to put $1500 for each card and keep my utilization below 5% monthly.

Some questions.

1. I see NFCU and PenFed (I had a loan with them once) have secured cards available. What is a good third card to get? I'm thinking TDBank, FNBO, Mercury are some options? Recommendations? Will secured cards usually approve quickly after DC?

2. Since I'm not taking CapitalOne down and I have a long history with them (car loan and 15+ years with the card I have now) how long should I wait to apply for the Quicksilver card? Is there a secured version of this card or is it unsecured?

3. I really like my AMEX cards. How many years realistically will it take before AMEX would approve me again?

4. I shop at Target a lot. How long until Target will approve me again for a card? 

5. The other card I really like is Discover. Low interest rate and their customer service is excellent. I've had some personal loans thru them over the years too. How long realistically until they would approve me after a discharge? I read they have a secured card available. Could I get that quickly after DC?

6. After you file if you go into a bank to open a new checking account will the BK stop you? Since I'm taking down the big banks I'll be moving to another bank here in town. I guess I could send everything to NFCU and do everything online but I like having access to a physical bank.

So ideally I'd like to be six months post DC with three revolvers, my mortgage payment, and my car payment, and making every payment ontime, keeping utilization low, and just chugging along. I'm not worried about assembling a giant credit card portfolio like I have now, I just want to reestablish. I'd like to be back to 700 in 4-5 years. Is that realistic?

Any advice or recommendations would be greatly appreciated. Thank you!

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My story is somewhat similar to yours, due to a stroke and a few years after that i became disabled. i had the stroke in jan 2014 but returned to work gimping around with a cane a few months later, i got away with it because i was a supervisor. then in 2016i broke my back pretty bad, shattered L1 vertabra and 5 damaged discs. in june of 2017 i was called in to a big board meeting and advised  i would be let go because i was a liability. i imediately filed for ssdi but that takes 6 months to kick in, in the meantime i owed 50k on revolvers which was fine when i was working and making 100k plus but not on ssdi.

i held on by my fingernails until sept 2019, i blew through 20k plus of savings and every dime i had. finally i had no choice but to file bk7.

my lawyer charged me the lowest rate because i was disabled and he knew it would be ez.

anyway my bk7 dc was mid december 2019. i burned some big boys like chase and td bank.

i waited until sept/oct 2020 to apply for any cards. my first approvals at that time were, target 300 sl, kohls 300 sl, big lots 750 sl, ikea 500 sl, firestone 1000 sl, valero gasoline 300 sl, all unsecured.

from then to now is day and night, now i get good cards with rewards and subs and bearable interest rates.

i am probably blacklisted for life at chase. amex will let you in 5 years and 1 month post bk dc.

i just got an amex from bread/comenity 6k sl.

as far as a few of your other questions.

the bk7 didnt affect me in opening up new checking accounts.

i got my discover 1 1/2 years post bk dc, i didnt burn them

[angelofmusic86]

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@righthererightnow wrote:

I posted this on another thread recently.... but.. had to say it again here. Capital One is suuuuuuper forgiving. They took me back six months after BK (and they were part of my BK). I would say give it six months, and see.

See also: this thread:
https://ficoforums.myfico.com/t5/Bankruptcy/Bankruptcy-Friendly-Credit-Cards-Pt-2/td-p/3999737

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Just a heads up - Capital One wants 12 months from date of first delinquency (or charge off, I can't remember which any more), so if they get included in your BK, you'll have to wait 12 months prior to getting a card (if they weren't burned, I'd say you could probably get a card from them day 1 after discharge lol).  I got back in with them less than 60 days from discharge, but less than a week after the 1 year mark of my charge-off.