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New start, well not completely.

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Anonymous
Not applicable

New start, well not completely.

Hi guys, I spent a lot of time on the forums before, during, and after discharge. I am truly appreciative that I was able to learn so much in the last few months. Here's my BK story thus far:

 

filed 10/31/19 with 93k in student loans, 3 of which are charged off, medical debt, $5000 in personal loans, $5000k in back taxes, state unemployment benefits, and about 7k in credit card debt. Annual income $64,000. I was aware 90% of my debt was student loans which could not be discharged but I was not able to handle payment plans for everyone I owed with my housing and student loan obligations.

 

MOC: it was cool, five mins. The trustee kept acknowledging my heavy student loan debt but whatever. He posted the report for no distribution the next day.

 

Last day for objection was 1/31/20. Case was discharged on 2/7. 

FICO scores at discharge: Experian 586 Equifax 621 and Transunion 586

 

Everything was fine and I was ok with these scores to start but then my student loans started reporting and I had 120 day lates on most of my loans so it brought my vantage scores down 35-60 points per bureau. All vantage scores are 580's.

 

Currently I have:

Indigo: 300 CL 

Mission Lane: $750 CL

Capital One Platinum : $500 CL (burned them for $3500. They let me back in a couple weeks after discharge)

Merrick Bank: $700 just applied this month after receiving the preapproval

Capital one Auto loan: $28,000 (approved one week after discharge)

 

Today my Vantage scores are still struggling after the student loans were added to my credit report but my FICO scores are below: 3b pull today 

 

Experian 621

Equifax 640

Transunion 602

 

i am going to the garden for a while and plan to refinance my car loan this fall. Any suggestions on my next steps?

 

 

 

Message 1 of 9
8 REPLIES 8
Anonymous
Not applicable

Re: New start, well not completely.

Do you mean $5000K or 5k in back taxes? 5000K is 5 million.


@Anonymous wrote:

Hi guys, I spent a lot of time on the forums before, during, and after discharge. I am truly appreciative that I was able to learn so much in the last few months. Here's my BK story thus far:

 

filed 10/31/19 with 93k in student loans, 3 of which are charged off, medical debt, $5000 in personal loans, $5000k in back taxes, state unemployment benefits, and about 7k in credit card debt. Annual income $64,000. I was aware 90% of my debt was student loans which could not be discharged but I was not able to handle payment plans for everyone I owed with my housing and student loan obligations.

 

MOC: it was cool, five mins. The trustee kept acknowledging my heavy student loan debt but whatever. He posted the report for no distribution the next day.

 

Last day for objection was 1/31/20. Case was discharged on 2/7. 

FICO scores at discharge: Experian 586 Equifax 621 and Transunion 586

 

Everything was fine and I was ok with these scores to start but then my student loans started reporting and I had 120 day lates on most of my loans so it brought my vantage scores down 35-60 points per bureau. All vantage scores are 580's.

 

Currently I have:

Indigo: 300 CL 

Mission Lane: $750 CL

Capital One Platinum : $500 CL (burned them for $3500. They let me back in a couple weeks after discharge)

Merrick Bank: $700 just applied this month after receiving the preapproval

Capital one Auto loan: $28,000 (approved one week after discharge)

 

Today my Vantage scores are still struggling after the student loans were added to my credit report but my FICO scores are below: 3b pull today 

 

Experian 621

Equifax 640

Transunion 602

 

i am going to the garden for a while and plan to refinance my car loan this fall. Any suggestions on my next steps?

 

 

 




Message 2 of 9
Anonymous
Not applicable

Re: New start, well not completely.

Lol 5k

Message 3 of 9
Anonymous
Not applicable

Re: New start, well not completely.

You have enough cards and loans to rebuild. Just maintain your accounts, report usage on only one card per month, make your loan payments, and start working on goodwill letters for any derogs you have that were not IIB. 

Maybe @calyx can assist with loan advice. There may be some things you can do that'll help the optics there and she's one of the loan ninjas we have here.

Message 4 of 9
calyx
Super Contributor

Re: New start, well not completely.

Thanks for the vote of confidence @Anonymous !

 

@Anonymous - I am assuming these student loans are in default?   If they are, contact the servicer(s) for a rehab plan.   For 9 months you make a (usually small) payment and the loans will be brought out of default & current.   The lates *might* stay (they aren't required to be deleted, though some servicers do delete them), but the tradelines are current.   There's literally nothing better you can do for those tradelines, assuming they are in default.  Older, established positive loans like that, is a huge boon to your FICOs (generally).

If you have previously rehabbed (you can only do it once), the other option would be consolidation.    I usually caution against it if you can rehab, as it won't bring the tradelines positive, so the negatives will stay on your report.  It starts the new loans as one new tradeline, which doesn't look as good as having the older lines for your FICO, but either is better than nothing Smiley Happy

Just FYI:  You can usually qualify for lower payment plans (Income based/income driven), which makes payments smaller/easier.  I make more than you by a fair bit, and my ICR (another one of the income based options) is ~250 (I pay more than that since I won't qualify for forgiveness and I want it gone, but you could pay the minimum and wait for the ~10-20years forgiveness).   If you need a break for payments due to economic hardships, you can usually get forebearance/deferred payments for a few months.     There are a lot of different options for payments to prevent issues and forgiveness options.  Definitely reach out and help if you need it. 

For now, though?  If you can, go for rehabilitation.      If you can't, then go for consolidation.   Either will help you in the long run.

Happy practitioner of AZE7or8or9or10 | Team Finances > FICO
Message 5 of 9
Anonymous
Not applicable

Re: New start, well not completely.

@calyx You are very welcome - it's not like you haven't proven it hundreds of times over Smiley Happy

 

@Anonymous - told ya Smiley Wink

Message 6 of 9
Anonymous
Not applicable

Re: New start, well not completely.

3 were charged off in 2017, all totaling 13k. They are private loans. I would have to wait for them to fall off.

 

50k in federal loans and they're all in good standing to date. I am making monthly payments on a income repayment plan.

 

 

$30k in private loans with NJ Class and Navient. They're in good standing. 

I continued to pay my student loans during the bk proceedings but the previous lates still had a bad impact on my credit score once they changed the status on the loans.

Message 7 of 9
Anonymous
Not applicable

Re: New start, well not completely.

Do vantage scores really matter?? They haven't went up since my student loans were added?

Message 8 of 9
Anonymous
Not applicable

Re: New start, well not completely.


@Anonymous wrote:

Do vantage scores really matter?? They haven't went up since my student loans were added?


Really they don't. They are a legitimate score model, but they're one that isn't used by lenders. FICO scores are relevant.

Message 9 of 9
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