I had to do it Chapter 7 Getting Filed on Thursday

[CostantinoA]

Well, I have been on this site for years.  I had all the best cards and numerous auto loans and just living life.  Then work-related injury and my wife giving birth to our daughter put us in a bad spot.

We are going to Chapter 7 about $200k in debt.  We are going to reaffirm our cars.  About 7 months ago, we stopped paying on our credit cards.  We kept paying the Auto Loans though.  

I look forward to building our credit again.  The BK attorney has a program to get your score to 720 in two years after discharge.  This site has been a great help over the years.  Now, it is time to review it again and learn how to fix this mess.

We want to obtain an FHA home loan right at the two-year mark.  Any advice on how to aggressively build after discharge will be good.  The problem is we had credit cards with almost every bank including subprime.  Not sure what banks are left to get a card though.

[sarge12]

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@CostantinoA wrote:

Well, I have been on this site for years.  I had all the best cards and numerous auto loans and just living life.  Then work-related injury and my wife giving birth to our daughter put us in a bad spot.

We are going to Chapter 7 about $200k in debt.  We are going to reaffirm our cars.  About 7 months ago, we stopped paying on our credit cards.  We kept paying the Auto Loans though.  

I look forward to building our credit again.  The BK attorney has a program to get your score to 720 in two years after discharge.  This site has been a great help over the years.  Now, it is time to review it again and learn how to fix this mess.

We want to obtain an FHA home loan right at the two-year mark.  Any advice on how to aggressively build after discharge will be good.  The problem is we had credit cards with almost every bank including subprime.  Not sure what banks are left to get a card though.

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You might want to find out if a re-affirmation agreement is required by the State to keep the car, or can just making the payments on-time allow you to keep the car. If you do not have to sign a re-affirmation to keep the cars, it is best not to. If you have not signed a re-affirmation, you can let the car go back any time without any further damage to your credit. My Neice had to file, and she was going to keep the vehicle without signing an agreement, but then the transmission failed. Keep in mind, that not signing means the lein holder can repossess it even if your payments are current. They usually wont do so though, because they usually lose money when it sells at auction. If they don't repossess it, you are still not legally required to continue making payments as the debt is still included in the bankruptcy. The lein they have on the vehicle is still valid though until the debt is paid in full. Under those circumstances, you are not contractually liable for the debt, but if you do not make the payments the lein holder will repossess it, but can't hold you liable for the defecit, nor even report it as a repossession on your credit report. If the amount owed is more than NADA value, it is not wise to reaffirm the debt.

[CostantinoA]

We discussed this with the attorney.  We are in Nevada.  He said we had to reaffirm it or let them take it.  We are not in a position to not have cars.  We are going to reaffirm it.  They are all newer cars and have a full bumper to bumper warranties till 100k miles.  Two of the cars are more than half way paid off.  That is a positive thing.

[sarge12]

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@CostantinoA wrote:

We discussed this with the attorney.  We are in Nevada.  He said we had to reaffirm it or let them take it.  We are not in a position to not have cars.  We are going to reaffirm it.  They are all newer cars and have a full bumper to bumper warranties till 100k miles.  Two of the cars are more than half way paid off.  That is a positive thing.

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Got it, You might need to go with a secured credit card for a bit. I also looked at your scores in the signature. This might be hard to believe, but it is very possible that after the debt is discharged, your credit score might go up!!!! My Neices score did go up! Lenders also might be more agreeable than you think, because you will not have all that debt, and you can't get any debt discharged for 7 years. I know people think it always causes the fico score to drop, and it usually does, but looking at how low your scores are now, it may go up. In any case, the 2 cars you are reaffirming on will report as new debt on your credit report, and if it was not reaffirmed, any payments you made would not report. You will have 2 installment loans reporting, and if you get secured credit cards they would report as well. 700 credit score in two years is possible.

[FireMedic1]

I reaffirmed having only 8 payments left on my truck. They didnt report from file date until after DC and online access to pay is cut off also. Then it started to report as usual. But there was no new account. It all stayed the same. Those months had (ND) no data. Paid it off and had perfect payments. Which helped the rebuild.

[VanderSnoot]

I'm sorry you're going through this, but it sounds like you have a good plan in place. Best wishes to you and your family.

[Anonymous]

BK is never easy but it is a way to start over and learn how to do things differently.  Nice to hear your attorney has a program in place to help with rebuilding.  The discussions here for rebuilding are amazing.  People are helpful and willing to share their defeats and successes.  

All the best with your rebuild and may you come out stronger than ever. 

[JaseT]

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@CostantinoA wrote:

We discussed this with the attorney.  We are in Nevada.  He said we had to reaffirm it or let them take it.  We are not in a position to not have cars.  We are going to reaffirm it.  They are all newer cars and have a full bumper to bumper warranties till 100k miles.  Two of the cars are more than half way paid off.  That is a positive thing.

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How much equity in automobiles is allowed/exempt in Nevada under a BK7?

[CostantinoA]

That is what the attorney said.  He said they will go up in about 6 months after filing which is tomorrow.  We will see.

[CostantinoA]

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@VanderSnoot wrote:

I'm sorry you're going through this, but it sounds like you have a good plan in place. Best wishes to you and your family.

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Thank you!