Loans

Loans (mortgages) are secured loans, the house is the collateral. In some cases a death benefit is included in the homeowner's insurance that may cover the outstanding balance. A surviving spouse, co-owner, etc. will have to pay the balance of the loan or sell/forfeit the property.

It probably would not be looked upon in a positive light. It would be the decision of the lender to accept this type of payment.

Simply closing a credit card should have no impact on your credit scores. However, consumers need to have open credit accounts (including 2 - 4 revolving accounts), that are paid as agreed, in order to have the highest possible score. Sooner or later the lack of this variety of credit accounts will be reflected in the point range.

Rather than close this account, why not keep it open (the existing history will help your score), use it monthly for a small purchase, pay it off in full (and ON TIME). You will eventually need to open another revolving account and use it in the same manner for the highest possible scores. Be sure to time the opening of your next account for a time when your score can accommodate the deductions for the inquiry and "new account" status.

From my understanding after filing Chapter 7, our house was not reaffirmed, but the mortgage company clearly states that as long as the payments are kept up they will not take action against the house and if they do, their interest is solely in the house, not contents.

Most likely.

If you file before the vehicle is sold, the Automatic Stay that gets imposed stops the sale. You can then go back and work on how to pay the arrears. If its a Chapter 13, then they are simply in the plan.

If the car has already been repoed, then make sure you call the bank (or whomever you got the loan through) and tell them you filed. Give them the case # and the chapter.

No. But if you have equity in your home it may not be the best approach. A chapter 13 is designed for a situation where the person has equity or is behind on payments. In a Chapter 7 - You will be asked to pay the Trustee the value of the equity of your home... so if you have $15,000 in non-exempt equity, you'll most likely have to write a check to the Trustee for $15,000 or surrender the home. no ,but if you include the Mortgage on your property in your bankruptcy,most likely you will have to surrender the property to a court appointed trustee

You can file bankruptcy on a home and all unsecured debt. You can include your home if you wish or re-affirm your home and your vehicles. Be sure to go to a Bankruptcy Lawyer and find out first hand. Many offer free consults and will give you a much more reliable answer than myself or any other idiot on here.

I would say the difference between a bankruptcy and a bankruptcy with a repo is not great enough for a person to keep a car they cannot afford just to maintain a slightly higher credit score. This is especially true in light of the fact that one's credit score will improve in 12 to 36 months after bankruptcy anyway, and especially in light of the fact that a reaffirmed car that one later defaults on after bankruptcy will hurt one's credit score again down the road AND potentially leave the person owing money after the car is repossessed and sold. But, this is admittedly very subjective. The bankruptcy itself will reduce your credit score by 75 to 150 points (depending on the circumstances of the case, circumstances the credit reporting agencies won't release since how they determine your score is a big secret), and I don't know how much a repo lowers your score. Certainly your credit score will remain a little higher if there is not a repo involved as well. But, if the question could be re-stated to say "Should I reaffirm (keep) my car in my bankruptcy case so my credit score doesn't drop so much?" then I would say this is highly dependent on whether one can afford the car. If one can afford the car and wants to keep it (and keeping it won't cause an undue hardship on the debtor or the debtor's family), then go ahead and keep it and the credit score won't suffer so much. If however one can't afford the car or is struggling to make payments, then keeping it just to protect a credit score that will improve over time anyway isn't worth it. And, if one reaffirms a car and then defaults down the road, that person lost their bankruptcy protection on the car and will probably get sued. I heard a trustee say (at a 341 meeting) that filing bankruptcy and keeping debts you can't afford is like taking a shower with a raincoat on, it accomplishes nothing. I think this is pretty sage advice the trustee gave. Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.

This is one of those "maybe" questions. I would think it doubtful, as you cannot play favorites when it comes to creditors. It will be up to the trustee to decide if that is allowable, and whatever your state statutes allow as exemptions.

I agree with Nikki, this is a "maybe" question. And I'll further amend that to "maybe but probably not."

As Nikki already pointed out, it does depend on the law of the district in which you filed the bankruptcy.

In Indiana (7th Circuit), you can only wipe out a second mortgage and keep the house if you file a Chapter 13 and you can show to the Court, by filing a separate motion (called a Motion to Strip Mortgage), that you owe more on the first mortgage than the real estate is worth. So, if the second mortgage is completely unsecured, you can wipe it out. But, if it is secured by even one dollar, then the whole mortgage survives and has to be paid. The case allowing the stripping of unsecured inferior mortgages in the 7th Circuit is First Bank, Inc. v. John R. Van Wie, et al, Bankruptcy Case No. NA 02-0120-CH/H.

There is also some variation in the law depending on whether the real estate is the debtor's residence or not.

See a lawyer in your area to see what laws apply in your district. Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.

Sorry, but I don't see how this could happen. Was your ex granted the house in the divorce proceedings. Or were you still on the title? If you want to email me perhaps we could sort it out together. You're best option would be to contact the attorney who handled your divorce. The house should have gone into the bankruptcy proceedings unless it was covered by exemption and the loan was reaffirmed by your ex. This sounds ver odd and complicated.

Generally -

Chapter 7 allows you to purchase a car or get a loan for a car after DISCHARGE (about 6 months after you goto court - you'll get a letter)

Chapter 13 allows you to purchase a car at anytime WITH permission from the Trustee. Its called a Motion to Incur Aditional Debt.

I went to court in August 2004. My debts were discharged October 2004. I just bought a car in December 2004. I got a good price and a high interest rate, but it was still a lower rate than I was paying on the car I included in the bankruptcy! I still can't believe how easy it was. If you're in the Puget Sound area, I can tell you where to find a car loan.

What kind of downpayment did you have to do?

First of all, if the student loans are Federally funded, they cannot be discharged in BK. A hardship discharge is granted only when the loan holder has become disabled. The disablity has to be severe enough, there is no possibility of the debtor ever having earnings or assets to repay the loans. Any other hardship defense, has to prove, the debtor will not be able to afford the "necessities of life." Those being the obvious, food, shelter, medical care, support of dependents, etc.

Sorry, it occurred to me you must be referring to a Chapter 13 rather than 7. Nevertheless, the premise is the same. To have payments reduced the debtor has to prove the amount would indeed make it impossible for he/she to provide for everyday necessities.

This depends on the type of loan you are referring to and the lender.

Mortgage lenders typically want a person to have 12 months clear credit history after a bankruptcy has been Discharged (not filed). Automobile and credit card lenders like the same, but there may be exceptions. The best thing is to ask, without allowing your credit to be pulled.

The only thing I would add to the other posting is..Beware of predatory lenders. The type who have ads that read "bankruptcy, bad credit, no problem", or something of that nature. IMO, they are loan sharks, and you need to be extremely cautious.

While in a 13, debt repayment, all major financial transactions have to be cleared with the Trustee that handled the case. The court is usually understanding in circumstances where the debtor needs a vehicle or home repairs, etc.

Ususually in BK a house is either voluntarily surrendered, because it is not possible for the borrower(s) to keep up payments.. Or the buyer reaffirms the loan with the lender and works out a plan to repay missed payments. If your mortgage payments are current, I see no reason why the lender would seek foreclosure.

Was the 2nd lien included in and discharged in your bankruptcy? If not, then that lien still encumbers the title to the property and is probably a debt you still owe.

No, not via the loan. It may get a little screwy because of you being married though.

I filed a 13 in Indiana and my wife cosigned on a bike loan and she now has problems getting credit eventhough I was the one to file. Also the criedit company still holds her responsible for the intrest.

There is the possibility, although the probability is low. Most consumers find it impossible to get financing with an ongoing Chapter 13 bankruptcy. Usually, you need to have at least 12 months after the BK is discharged before you are lendable again. That being said; there are programs which do not consider credit at all. Given the right broker who is experienced, and enough money, anything can be accomplished.

You must also ask your Trustee for permission to assume additional debt.

I found this helpful: Current Bankruptcy If you are currently in chapter 13 bankruptcy, you may be able to qualify for a home loan. In fact, some lenders can actually provide FHA loans at low interest rates for borrowers in chapter 13. Re: HUD Handbook section 4155.1 Rev-4. "A borrower paying off debts under Chapter 13 of the Bankruptcy Act may also qualify if one year of the pay-out period has elapsed and performance has been satisfactory, and the borrower also receives court approval to enter into the mortgage transaction."(http://www.emortgage.com)

I am trying to use the FHA to get a home loan while in chapter 13 and I have been trying to get them to clear a house since August. I made over $80,000 last year and all the BK judge would approve for me to have in a loan was $45,000 so don't get your hopes up no matter how good you have done with the bankruptcy. I have the money taken out of my check every much so I have never missed a payment and this process is a nightmare that has made me cry night after night. The mortgage broker says I would have been better off if I have filed chapter 7. Isn't that a kick in the teeth!

ANSWER

I am currently in a Chapter 13. Due to divorce and my husband's bills which I got stuck with. I thought I could get some reduced rates on my bills with Chapter 13. NOT. The lawyer told me that I would be clean after bankruptcy. NOT. I would have been better off just to NOT PAY all the unsecured debt. That is what my ex did, and guess what? They laid all that debt on me. He is scott free and bought a NEW HOUSE. Even though I was NOT on his cards. We were married so I am stuck with the debt. Don't EVER declare bankruptcy. Just don't pay the unsecured debt if you can't pay it. Your credit will be trashed no matter what and unpaid unsecured debt looks better than a bankruptcy. The only one who gets rich on bankruptcy is the lawyers. I've been trying to get a loan to pay off the rest of the bankruptcy and get back to normal but I can't. My Chapter 13 takes $2500 out of my $3220 monthly pay. And I can't even fix my roof. I can barely pay for food and because I make $3220 per month I don't qualify for any aid of any kind. It's a nightmare. NEVER NEVER NEVER DECLARE BANKRUPTCY

The only way is try to negotiate a reaffimation agreement with the lender. However, if the house is not protected by the homestead exemption, it could still be in jeopardy.

It is sometimes said "anything is possible . Nevertheless, given this set of circumstances, it would be indeed be impossible.

Residential mortgage lending is driven by credit scores. You did not mention what your score is. Other factors, like the lack of a down payment and the bankruptcy would be contributing factors as would your debt-to-income ratio, state of the subject house, etc. But, your credit score would allow someone to give you specific advice as to whether or not you stand a chance of qualifying for a mortgage.

Why would it be "impossible?" Studies have shown that if you maintain payments on a secured credit card, auto loan, etc, then as little as 2 years after the date of discharge, you may qualify for a mortgage with interest rates near that of "good" credit holders.

I know, because my parents have done just that.

1)You don't have any debt because of the bankruptcy, right? Which means, you ow very little if nothing. Soooo, creditors like it when you have a great amount of disposable income.

2)You can't file for another bankruptcy for 6 years...sooooo, the creditors are safe from being included in a subsequent bankruptcy.

Thanks.

I seriously doubt there would be much chance of securing a homeowner's loan given these circumstances. If it were at all possible the interest rate and down payment would be VERY high, regardless of the value of the property.

The amount of a down payment would be the decisions of the lender. That decision would be based in part on your current credit history, and financial situation. Some lenders consider someone who has had a recent BK discharge as a good risk. The presumption being that the applicant is (or should be) almost debt free.

A secured lender (especially a mortgage holder) has a lot of leverage when collecting on the loan. If the stay is granted an the loan can be reaffirmed missed payments and penalties made up (plus regularly due payments), foreclosure is a certainty. It might be wise to let the house go in the bankruptcy, whereby you can collect your exemption and at least not lose your equity (investment) in foreclosure proceedings. State statutes differ in how foreclosure proceedures and/or bankruptcy homestead exemptions apply. If you have a decent attorney, they can normally put on some "shmooze" and get an agreed order in to either buy you some time to make up the arrears, or work out another deal with the lender.