I wanted to update the board on my progress. My story is well documented but I will provide some background.
1) Lost high paying job in the 2008/09 Disaster
2) This stress caused divorce
3) A few medical bills
I filed BK7 JAN 2011, Discharged JUN2011.
I followed the guide: BK7 to 700 in 2 years. I hit the 700 mark in 22 months. I had several baddies (CC, Car Loan, Student Loans. State Tax Lein). I was successful in several CC goodwill. USDOE also worked with me on a rehab program. They brought me current from day 1 (I am not sure if they still do this. I heard they stopped this). I was able to purchase a new car in 18 months but the interest rate was a little high at 4%. I remained in my house and paid the mortgage.
There were several accounts that were stubborn and finally aged off. I had success with TU and EX to have these accounts EE. Slowly but surely, I started to increase my stash of CCs. I am up to 12 cards with a combined limit of $200K. My verifiable (W-2) income is back to about $130K. Since the 2 year mark, my score was range bound between 700~720 for 4 years. No matter what I did with the CC balance; I could not break above the 720 mark.
Slowly the baddies (~10 total) started to fall off. As each fell off, I received a few point increase. Once the last baddie (save BK7) dropped, my score jumped up to 750. I suspect my scores will remain at 750 until the BK7 dropped in Dec 2020.
Overall, my BK7 experience was actually good. The stress and fear of the unknown was worse than the reality. The first two years are the toughest because noone wants to take a chance unless they hit you with high % or annual fees.
Another good event to note: My house was NOT reaffirmed. However, I stayed in the house and paid the mortgage. Wells Fargo dropped the 2nd Mortgage lein (Home Equity to pay children's college). I owed about $120K but the values in my neighborhood dropped. After 4 years, I got requalifed (local lending company) on a FHA 15 year @3.5% mortgage for up to $200K. (FHA has a 4 year wait post BK7).
So I called WF and told them that I was going to purchase the house 2 doors down because it was bigger, the price was dropped because it was a foreclosure and the interest rates dropped. I told them that I can "walk away" from my house without any negative penalty so "why should I stay in this house?" I was put on hold for a few minutes then the Supervisor came back with the best line she could, "why do you want to leave? You have so many memories in that house" I laughed out loud and told her that I will make many more new memories in a bigger, newer, less expensive house just a mere 2 doors down. (I did give her a A for effort because the "memories" was the only tactic she had to convince me to stay)
WF asked me to counter offer them so I did offered $80K to pay off the lein. I was put on hold for a few seconds and she came back and accepted. So I paid off my house for $80K, my payments are several hundred dollars CHEAPER and I took 5 years off (I had 20 years left). Now I pay an extra $500 ~$1000 per month. I should have it paid off in 10 years (6 years left). My goal is to be debt free BEFORE the BK7 dropped. I will keep a secured loan open to maximise my score of course.
So overall, I am significantly better off because of the BK7 compared to trying everything I could to avoid BK7. I would juggle bills, take back pop bottles on certain days of the week, cut coupons; hell, I even waited until late at night to fill by gas tank so the gasoline was a lower temperature and I would get more gas per gallon (maybe a few extra drops?)
So anyone who is thinking about BK7 and stressing out: DONT. The BK laws are there for a reason. BK is NOT a reflection on your morals or whether you are a good person or bad person. Just make sure you LEARN from your mistakes, be honest with yourself and CHANGE your lifestyle to avoid the circumstances that led you to this point in the first place. Most BK Attorneys recommend AGAINST re-affirming anything because people are creatures of habit and will fall back into the same routine. Dont be that statistic.
FICO 08 JUL23: TU 850; EQ 846; EX 843. Clean since BK7 D/C 6/2011.
