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Posted in Bankruptcy
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Docdic

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0 People Helped
Filed chapter 13 because of identity theft but just bankruptcy shows
I also pd off most credit cards & closed Accts and my score went down. I'm trying to raise my score & was advised to do this.

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identity theft & etc.

Helpful to 23 out of 24 people

When deal with identity theft, never file 13. If you did not do any of what you are being accused of dont try and consolidate it down to a monthly balloon payment. Get rid of it all. As previous users stated ch-7 does increase your score fast. Little do many know when you file CH-7, you can include any federal loan and wipe out interest on it, not the actual loan. Of coarse it stays on your record for years but im pretty sure you can find some attroney's office who can get that derogatory mark wiped right off. Im november of 2015 i was at a 593. YTD im at a 706. Trust me never use over 20% on all credit cards, on occassions max it out just to let them know that every blue moon you may need them and they will increase you with out asking. In Dec opened up a cap 1 card limit was $400, in March increased to $800, July increased to $1,300 & on Aug 4th increased to 3k. When it comes to improving credit im the man for it.

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Reply by
Random789644

213 Contributions
94 People Helped
Helpful to 7 out of 7 people

FYI - a Chapter 13 is not a consolidation of debts. Instead it reduces overall debt down to a certain fraction of what you owe overall. It does this by telling creditors of secured loans to (unless negotiated otherwise by the debtor) take their security and go away (e.g. a mortgage company who foreclosed on your home has to remain satisfied with only the money they got from auctioning off the house, and can no longer come after you for any shortfall.) Certain other unsecured loans may be written off as well, though I forgot what factors into that but of it. 

The rest does go into a repayment plan, but it often does not repay the entire debt (even after you discount secured-loan creditors who got told to bugger off).

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Now - that said, there are instances where a Chapter 13 can at least cut down the bleeding, and in some rare cases actually help your credit score. If you have a mortgage and auto loan which you and the court exempt from the bankruptcy proceedings (you're allowed to do this if the loan(s) are current), you still get good credit for continuing to pay those loans off faithfully, while the bad debts are halted and no further bad-reporting damage is done. You'll still get the hit of a bankruptcy entry on your credit report, but sometimes it's a lesser evil when compared to numerous creditors who continue to insert derogatory entries month after month. 

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Either way, always talk to a lawyer and make your decision based on your circumstances before using/avoiding bankruptcy.

Reply by
mdlt27

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0 People Helped

I'm wanting to fix my credit. I'm at a 560. I dont have any credit cards just old things that have been on for years. How can I consolidate them and fix this without having to file bankruptcy? Can someone give me some advice?

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23 People Helped

credit blues

Helpful to 23 out of 27 people

The last person that responded told you exactly how it is. I filed chapter 7 in 2015, and i'm trying to rebuild my credit. My co-worker filed chapter 13 in 2014. My credit has been on the rise ever since, but his score is falling. Now he is going to change to a chapter 7. I'm not sure if you know this, but you can do that. Just do the math. He filed chapter 13 in 2014, and his score has dropped 87 points. I filed chapter 7 in 2015, and my score went up 93 points. And all I did was monitor my credit on Credit Karma. I used the simulator tool and followed their recommendations. It works, it will tell you if your score will increase or decrease based on what you do on the simulator. For instance, if I get an increase on my credit card, my score will decrease by 22 points. But if I get an additonal credit card my score will increase 6 points. Use the simulator to see what actions you can take to increase your score.

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Reply by
Random789644

213 Contributions
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Helpful to 10 out of 11 people

Note that sometimes you cannot convert a Chapter 13 to a Chapter 7. It all depends on your income and (to a smaller extent) the debt totals. 

1 Contribution
10 People Helped

Agreed

Helpful to 10 out of 11 people

After BK you need to establish a payment history - this means paying consistently rather than paying off things.  Getting the score counter (running 2 year history of payments... should look like this when you get straight:  111111111111   111111111111) of months where a payment was made on time is far better than paying an installment loan in full.  When you pay it in full, they stop reporting monthly.  This is especially bad if you were a couple of payments behind and then pay the loan in full.  The poor rating they gave you when you were late will not be updated (they stop sending the data when the loan is paid) and that bad rating will be stuck there for years. 

As for credit cards, most large lenders will close your account when you file BK anyway, at least to new charges.  I'm not sure what happened to you regarding interest rates but i would pay more toward the highest ones per month but that is for financial benefit rather than score increase.  Lastly, Ch 7 BK is truly a better option for many people if your situation allows for you to file it.  In Ch 7 all your card companies simply write off the debt rather than taking 5 years of payments and still rating you unsatisfactorily.  There are downsides of course, Ch 7 is a liquidation and you can't file it and keep tons of assets if you have that problem.   You can still keep your house and car generally if you are paying on them. 

About a year after your BK is over you may be able to get an unsecured credit card, if you have been current on everything since filing BK.

Best of luck.

9 Contributions
9 People Helped

Unsound advice

Helpful to 7 out of 9 people

Not sure who advised you that closing all of your accounts and filing bankruptcy would improve your credit in any way shape or form but they must have been your enemy because that is precisely how you lower your score.  

1 Contribution
2 People Helped

Bk. Chapt 13

Helpful to 2 out of 3 people

How long does chapt 13 remain on the books. I was in it for 3 months. Due to elder care. Everything was paid off. Have new cc with very low balance. No morg or car pmt

1 Contribution
3 People Helped

sassygramma12

Helpful to 3 out of 5 people

I'm so confused, what to do I owe like 10,000 , and 30,000 in student loans only get 538 a month please need advice

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Reply by
Random789644

213 Contributions
94 People Helped

Talk to a lawyer (preferably two or three different ones)... most will give you free advice on the first visit, and they can help you figure out rather quickly what you need to do.

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17 People Helped

Helpful to 1 out of 1 people

Bankruptcy will never help your credit score, it only hurts. Maybe the person giving you advice, meant bankruptcy was your best option given your debt situation.

1 Contribution
0 People Helped

Bankruptcy

I much it cost to go bankrupt?

1 Contribution
1 Person Helped

Identity theft

Helpful to 1 out of 2 people

MsAminah

1 Contribution
0 People Helped

Comment on your credit reports

Helpful to 0 out of 1 people

Pull a full credit report, ask to dispute it, you don't actually dispute anything,  but this allows you to add a comment to the derogatory report, stating the bankruptcy was your only option due to identity theft.  It won't change your score, but may make it easier to get new credit.

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