Rebuilding Credit During Chapter 13 Bankruptcy Repayment Plan

This article on Rebuilding Credit During Chapter 13 Bankruptcy Repayment Plan

Rebuilding Credit During Chapter 13 Bankruptcy is highly recommended for those who want to purchase a home and/or refinance their current home.

• Consumers do not have to wait until Chapter 13 Bankruptcy has been discharged to start re-establishing their credit
• Re-established credit, high credit scores, and a strong credit profile mean lower mortgage rates, lower insurance premiums, and better opportunities in getting a job and/or a promotion at work
• The best way of re-establishing credit during Chapter 13 Bankruptcy is by getting new credit and have the payment history report on credit reports
• Many consumers are told they cannot get new credit during the Chapter 13 Bankruptcy repayment plan
• This is not the case
• Consumers can get secured credit cards and a credit rebuilder loan during Chapter 13 Bankruptcy repayment plan
• Bankruptcy Trustees will approve secured credit cards with at least $500 credit limits and a credit rebuilder loan program while in Chapter 13 Bankruptcy repayment period
• Gustan Cho Associates are experts in helping homebuyers qualify for a home mortgage during Chapter 13 Bankruptcy Repayment and after Chapter 13 discharge without any waiting period

Rebuilding Credit During Chapter 13 Bankruptcy Repayment Plan To Qualify For A Mortgage

http://www.youtube.com/watch?v=20Cs3LhSpKM&ab_channel=Gustan Cho Associates-MortgageBankers

FHA and VA loans allow homebuyers to qualify for a home mortgage during Chapter 13 bankruptcy repayment plan with Trustee Approval via manual underwriting.

• Chapter 13 Bankruptcy does not have to be discharged
• There is no waiting period after Chapter 13 Bankruptcy discharged date
• However, if the Chapter 13 Bankruptcy discharge has not been seasoned for two years, the loan needs to be manually underwritten
• Mortgage rates are determined by the borrower’s credit scores
• Chapter 13 Bankruptcy repayment plans are normally 60 months
• Homebuyers and/or homeowners who are expecting to apply for a mortgage during Chapter 13 Bankruptcy repayment plan should start re-establishing their credit as soon as filing Chapter 13 Bankruptcy

We will explain rebuilding credit during Chapter 13 Bankruptcy repayment plan so you can qualify for a mortgage with the lowest rates.

Do The Courts Allow Rebuilding Credit During Chapter 13 Bankruptcy

In general, most bankruptcy attorneys will tell you that you cannot take on new credit and/or take out a new loan during the Chapter 13 Bankruptcy Repayment period.

• Most Chapter 13 repayment plans are for a term of 60 months
• Most Trustees frown consumers taking on new debt that is not necessary during the Chapter 13 repayment period
• However, a small secured credit card and/or a small credit rebuilder loan program is normally not a problem by most bankruptcy trustees
• This only holds true if the consumer has been making timely payments on their repayment plan
• For example, if you need to trade in your junk car for a new car, most Trustees will approve an auto loan
• You need a car these days to use for transportation
• It is more of a necessity than a luxury
• Any debt that is greater than $5,000 needs bankruptcy trustee approval
• A new car falls in the category of needing trustee approval
• However, most trustees will not approve an RV
• RV’s is a luxury unless the person is going to use it as housing
• People can qualify for a mortgage during the Chapter 13 Bankruptcy repayment period
• Bankruptcy trustee approval is required

As long as it is a modest home and the homebuyer can afford the new mortgage payments, 100% of the bankruptcy trustees will approve a new home purchase during Chapter 13 Bankruptcy repayment period.

Getting New Credit During Chapter 13 Bankruptcy To Re-Establish Credit And Prepare For A Mortgage

Most bankruptcy trustees will not have a problem for consumers to get a couple of secured credit cards in order to re-establish their credit during the Chapter 13 Bankruptcy repayment plan. The ideal amount of secured credit cards to get for maximum credit optimization is 3. Get three secured credit cards with at least a $300 to $500 credit limit. Each secured credit card will boost your credit by 20 to 50 points. Besides the three secured credit cards, get at least one installment loan. The best credit rebuilder program is www.self.inc. What you are doing is make a $25 to $50 monthly payment. Self.inc will deposit that monthly payment towards your 12 month FDIC CD account. The monthly payments will report on all three credit bureaus. After your fourth payment, Self.inc will issue a $150 secured credit card without you needing to make a deposit. If you follow the above steps, you will have a credit score over 700 FICO in just 12 months after starting the credit rebuilding program after filing Chapter 13 Bankruptcy.