cancel
Showing results for 
Search instead for 
Did you mean: 

Where to go from here/how to start rebuilding

tipofthespork
Contributor

Where to go from here/how to start rebuilding

Good morning all.

My wife and I filed for chapter 13 bankruptcy in 2015. Our plan is due to be complete in approximately 1 year and I’m beginning to think about what we do when it’s over.

My ultimate goal is homeownership and obviously a good credit score.

We are an active duty military family and about 4 years from retirement. My next duty station will be my last and it also happens to be where I plan to live post navy retirement. In a perfect world we’d be able to buy a home when we move there (about 14 months from now/2 months after payment plan complete).

We have missed zero payments (thanks to automatic deduction) and have had nothing to do with credit since filing. We don’t have very much money left every month but make do.
For backstory, when we filed in 2015 we were a family of 3 and did not qualify for chap 7. We had a new child in 2017 and would qualify then but decided we were already more than half way through and didn’t want to start over.

Any advice or good gouge on how to start over smartly would be great. Thanks in advance

Starting Score: 574(may 2012)
Current Score: 574
Goal Score: 640 (to start)


Take the FICO Fitness Challenge
Message 1 of 8
7 REPLIES 7
KJinNC
Valued Contributor

Re: Where to go from here/how to start rebuilding

The first step is the most important, so, congratulations for taking the step to work on it.

 

I don't know anything about bankruptcy and have no insight to offer there, but I know others here have great info.

 

I originally wrote some other stuff here, but realized it's not applicable yet due to the status of the bankruptcy, so rather make you wade through it, deleted it.

 

Good luck!


FICO Resilience Index: 66. Cards: 14/24, 0/12, 0/6. Accounts including loans: 17/24, 1/12, 0/6. At first accidentally, later deliberately, I used what I call the "thick-start" build method, which leads to heavy credit-seeking for a while with the goal of coming out of it without needing to build a thin profile for years. There are pros and cons. Thread describing method
Cards (oldest to newest)

Authorized user / Corporate / Auto loan / Personal loan

Card CLs total $104,100, not counting the AU card. The AU card brings the total to $129,100. In March 2019, card CLs totaled $0.
CU and bank memberships: Coastal Credit Union, member since 1987, direct deposit; PenFed, member since 2019; Navy Federal, member since 2020; USAA, member since 2020; Chase Bank, member since 2020.

Closed but still on reports: American Express Delta Gold, $1,000, 09/19-10/20 | American Express Hilton Aspire, $3,100, 09/19-12/20 | Citi secured, $200, 04/19-09/19 | Capital One secured, $300, 04/19-08/19 | My Jewelers Club, $5,000, 05/19-08/19 | Green Dot Primor, $300, 05/19-08/19 | Self Lender secured $500 loan, 04/19-01/20 | Unsecured personal loan from Coastal, $1,000, 06/19-08/19.
Note: My signature is updated frequently, and updates appear on all instances of my signature including on old posts.
Message 2 of 8
FireMedic1
Super Contributor

Re: Where to go from here/how to start rebuilding

Best way to put it. Once you have finished your plan. You will see a score jump. Its a tad premature to gauge what your scores will be once its completed. They may land nicely to where you could get unsecured cards vs vulture secured cards. The FICO bonus for rebuilders is 3 cards and 1 installment. As you know you'll have to get the ok before the DC from the trustee for credit or any money moves. So in year that will be when it can all be figured out where to start the rebuild. For now it would only be speculation what your scores will be in a year.

Message 3 of 8
marty56
Super Contributor

Re: Where to go from here/how to start rebuilding

Once you move, I would join a local CU and start to establish a relationship with them or if possible, join one there now.

Rebuiliding takes time but it will work once you complete it.  Also post military employment is your best tool in rebuilding so plan now on what that will be. 

1/25/2021: FICO 850 EQ 848 TU 847 EX
Message 4 of 8
ImTheDevil
Community Leader
Super Contributor

Re: Where to go from here/how to start rebuilding

If you don’t already, I can’t encourage you strongly enough to open checking and savings accounts with NFCU. Start building your relationship with them now (if that’s allowed during a CH13 - I do not know). Navy Federal is very good to those who are good to them and will be a huge asset throughout your rebuild and beyond.

Congrats on soon successfully concluding your Navy career and thank you for serving!


Platinum NPSL | Rose Gold NPSL | BCP | Delta Gold | Hilton Surpass | Hilton Honors | FNBO Prime Visa | PenFed PCR | Navy cashRewards | Navy Platinum | Apple | IT Cash | IT Chrome | GHSFCU Visa Plat | Quicksilver | Target | VS | Home Depot | Lowes | Sams MC | Firestone | Overstock | Kohl’s | Key Bank auto loan (2017 Audi A6 Premium Plus S-Line)





Message 5 of 8
DIYcredit
Frequent Contributor

Re: Where to go from here/how to start rebuilding

Immediately you should start rebuilding with a cap one secured or unsecured cc and make monthly on time payments.When your cc debt is paid, keep cc utilization 1-6% and try to live within your means so their is no cc debt.In the future you will want to establish on unsecured cc as your oldest open cc account and never close it.You are missing credit score points by not having an open cc.GOOD LUCK...

Message 6 of 8
FireMedic1
Super Contributor

Re: Where to go from here/how to start rebuilding


@DIYcredit wrote:

Immediately you should start rebuilding with a cap one secured or unsecured cc and make monthly on time payments.When your cc debt is paid, keep cc utilization 1-6% and try to live within your means so their is no cc debt.In the future you will want to establish on unsecured cc as your oldest open cc account and never close it.You are missing credit score points by not having an open cc.GOOD LUCK...


Doesnt work that way. A stipulation in Chapter 13 bankruptcy law states that you are not allowed to increase any debt without receiving the permission of your bankruptcy trustee. If you do apply for a credit card, your bankruptcy payment plan will be canceled and the bankruptcy proceedings will be stopped. Your trustee views Chapter 13 bankruptcy as a serious matter and expects the same from you as a debtor. Bankruptcy courts and trustees will not tolerate abuse of bankruptcy laws relating to state or federal government guidelines. In fact, if you attempt to abuse the law, you may face litigation if regulators perceive an intention for fraud. If this were to occur, you may find yourself in front of a district attorney. 

Message 7 of 8
DIYcredit
Frequent Contributor

Re: Where to go from here/how to start rebuilding

Obviously with permission first.

Message 8 of 8
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.