Secured card in active Ch 13

jetsfan2013 · ‎09-25-2023

Reviewing and filing my 13 on 9/1.

It will be a 100% repayment, 60 month case, although I hope to complete it sooner.

Is it possible to begin rebuilding credit via a secured card in the first year of a 13? Even if it was $500, that would help when I do have to rent a car to visit family for travel from to time.

Ch 13 Filed - October 2023
Last Payment - September 2028
Discharge - November 2028?
FICO 8 Scores as of May 2024
EQ 650 EX 625 TU 613

FireMedic1 · ‎09-27-2023

Being so soon. No telling. But things have to go thru the trustee with a 13. Others will chime in that have lived thru a 13.

Horseshoez · ‎09-27-2023

@jetsfan2013 wrote:
Reviewing and filing my 13 on 9/1.
It will be a 100% repayment, 60 month case, although I hope to complete it sooner.

Is it possible to begin rebuilding credit via a secured card in the first year of a 13? Even if it was $500, that would help when I do have to rent a car to visit family for travel from to time.

The short answer is, "It depends".

The thing is, the answer to your question varies by Trustee; my Trustee prohibited me from a secured credit card for the entire duration of my Chapter 13, there are many other posters here who got a secured card almost immediately after they filed.

Chapter 13:

Burned: AMEX, Chase, Citi, Wells Fargo, and South County Bank (now Bank of Southern California)
Filed: 26-Feb-2015
MoC: 01-Mar-2015
1st Payment (posted): 23-Mar-2015
Last Payment (posted): 07-Feb-2020
Discharged: 04-Mar-2020
Closed: 23-Jun-2020

I categorically refuse to do AZEO!

In the proverbial sock drawer:

citymunky · ‎09-27-2023

I was prohibited from opening any new credit as well.

Rebuilding since 2021

Closed CCs
USAA (Jul 2019| Settled CO), Jasper $1K CL (Jul21-Jul22), Sable $250CL{Secured} (Jan22-Jun23), CreditOne Platinum $750CL (Jul21-Aug23), Prosper $1.9K CL (Jan22-Apr24), Self $625 CL {$350 Secured } (Aug21-Jul24)

Starting FICO 8 Scores:

Current FICO 8 Scores:

Jeffster1 · ‎09-27-2023

@jetsfan2013 wrote:
Reviewing and filing my 13 on 9/1.
It will be a 100% repayment, 60 month case, although I hope to complete it sooner.

Is it possible to begin rebuilding credit via a secured card in the first year of a 13? Even if it was $500, that would help when I do have to rent a car to visit family for travel from to time.

It's all dependent on your trustee. Do not make a single move without consulting with your attorney first. Don't risk having your case dismissed.

FICO 8 EX 829 EQ 824 TU 844
American Express Blue Cash Preferred 30K I American Express Blue Cash Everyday 25 K I American Express Cash Magnet 5K I Bank of America Customized Cash Rewards Visa 20K | Kinecta MyPerks Rewards MC 35K | Wells Fargo BILT World Elite MC 30K I BMO Harris Cash Back MasterCard 12K | Capital One QS MC 12.5K I NFCU Flagship Rewards Visa 32K I NFCU Amex 28K | NFCU CashRewards Visa 20K I America First CU Cash Visa 20K I Citi Best Buy Visa 10K I Macy’s Amex 20K I Bread Financial American Express 13K I AAA Daily Advantage Visa Signature 8.5K I Saks Fifth Avenue World Elite MC 8.3K I JCPenney Mastercard 6K I UCLA Wescom CU Rewards Visa 7K I Pottery Barn Visa 5K I PayPal Cash Back Visa 9K I TD Bank Double Up Visa 5K I USBank Cash Visa 5K I

CH-7-Mission-Accomplished · ‎09-27-2023

@jetsfan2013 wrote:
Reviewing and filing my 13 on 9/1.
It will be a 100% repayment, 60 month case, although I hope to complete it sooner.

Is it possible to begin rebuilding credit via a secured card in the first year of a 13? Even if it was $500, that would help when I do have to rent a car to visit family for travel from to time.

As others have said, it depends on the district you are in. Some trustees view secured debt like secured credit cards and secured installment loans (meaning credit union share secured loans) as not "loans" per their policies. I have also read about districts that will allow up to, say, $5000 in credit. And even in districts where the trustee allows it, a lot of BK attorneys are strongly opposed to it. And there are people that just do it without any approval, but that's foolish because all of the money you've paid in legal fees and the break you got on repaying a discounted amount goes out the window if the trustee dismisses your chapter 13. Would they do it for getting secured credit? Who knows, but it's just not worth it. And remember, two out of three chapter 13s fail. As others have said, five years is a very long time and all kinds of things can happen to derail you.

Good luck. Do inquire of your attorney first and try to find out the policy for your district.

TRC_WA · ‎09-27-2023

@Jeffster1 wrote:
Do not make a single move without consulting with your attorney first. Don't risk having your case dismissed.

Good advice.

I actually did the opposite... about 3 years in I got a couple CC's (unsecured) and started my rebuild. It was never an issue because I never heard from the trustee the entire length of my Ch 13 right up till the very end when he was doing the audit and said I needed to pay a few more dollars to complete the plan.

Not recommended but wanted to share that it is possible to get away with it. I mean... I figured is the trustee really checking my credit report? I would guess not which is why I did what I did.

FICO8 current as of : 4-6-25 EQ: 736 TU: 728 EX: 722
Hard INQs last 12 months: EQ: 0 | TU: 0 | EX: 0
Verizon Visa $8500 Amex Delta Reserve $10,000 Care Credit $18,000
NFCU CashRewards $7500 Apple Card $7000 Best Buy $8000 Amazon $5000
NFCU auto loan (2022 Ford Bronco Sport Badlands - Cactus Gray) 6.95%
NFCU motorcycle loan (2024 Harley Davidson Road Glide - Alpine Green & Chrome) 9.45%
Total CL: $64,000 --- Total CC UTI: 31% --- AAoA: 6.5 years --- Income: $200k
Last app: 4-6-24

Lurker22 · ‎09-27-2023

@Horseshoez wrote:
@jetsfan2013 wrote:
Reviewing and filing my 13 on 9/1.
It will be a 100% repayment, 60 month case, although I hope to complete it sooner.

Is it possible to begin rebuilding credit via a secured card in the first year of a 13? Even if it was $500, that would help when I do have to rent a car to visit family for travel from to time.

The short answer is, "It depends".

The thing is, the answer to your question varies by Trustee; my Trustee prohibited me from a secured credit card for the entire duration of my Chapter 13, there are many other posters here who got a secured card almost immediately after they filed.

Agree completely, it absolutely depends....my trustee viewed secured cards not as loans because they were backed by a savings account...so I was allowed to obtain secured cards...check with your attorney, they'll know best (and yes I do feel having a secured card helped me jump start the rebuild, just wish I had asked my attorney sooner instead of 13 months from completing the plan)

TJHunt · ‎09-28-2023

This is a question for your Lawyer. I filed chapter 13 on a 100% repayment plan. I have 3 unsecured credit cards, 1 store card, 1 secured card, and 1 secured loan. The only warning he gave me was to not carry more than a 1000 unsecured balance.

I got my first unsecured within the first 30 days of filing ch13. It was Mission Lane.