Hate to raid on your parade but this information is correct. There are multiple types of what he is talking about. One is rapid rescore that does little more than a temporary fix. The other actually “challenges” the credit companies and make them prove that these things on your credit, 60% of the time the don’t want to prove or can’t prove and so they take it off…now remember thats only about 60% of the time, the other times you can still get them off but they usually stay.
I’m just trying to figure out… I’ve been getting advice from many different angles, and from many different people and gotten really conflicting information from different sources.
I’ve had a loan officer tell me that after a Chapter 13 it will be about 2 years before you can go back to getting a normal Mortgage loan on Real Estate, and I’ve heard others say that if you start re-establishing your credit immediately after filing, that you can get a decent loan in as little as 6 months.
I’m just trying to sort out fact from fiction, and figure out if Chapter 13 is really a career killer for an RE-Investor. What experience have you folks had with Chapter 13 Bankruptcys and what advice would you give?
As far as my situation goes, I’ve got around 30K worth of debt in Credit Cards, Hospital Bills, and things of the like. I can’t get any loans as it is to buy investment property or even my own residence due to my large debt and low income, so I would think this might be the best way to go. Wipe out my debt, and give me a chance to rebuild my credit.
However, I hear some people say Chapter 13 is ‘no big deal’ and others say it will haunt you for years afterword.
For a Real Estate Investor, what can I expect from Chapter 13 Bankruptcy? What caveats might you have for me, what would make it ‘worth it’ to go ahead with the Bankruptcy?
Posted by Dennis IL on September 16, 2004 at 12:34:50:
DownOnHisLuck-IL,
The reality that I have seen in IL as far as getting a mortgage after BK is this;
If you have an LTV of 80% on your residence, including the chapter 13 buy out, and your Mid FICO is 500+ (not that difficult), you may be able to refinance without waiting any length of time.
I am a mortgage broker in IL and I have done these types of loan. However, the interest rate is a bit higher then your “normal” mortgages, but not as high as you might think.
I know of another program that can get you 100% LTV after 12 months of chapter 13 payments, if the numbers are right.
Ofcourse, the decision to file BK is a difficult one and should not be taken lightly as there are some cases that can not get a loan because their FICO dipped below 500 or they do not have the equity in their home.
From your post I am not sure whether you own property now or not. If not you might want to consider chapter 7 instead of 13. Consult a lawyer to explain the difference!
The programs I mentioned don’t care if it is chapter 13 or 7.
I can connect you with a girl who has inside connections with the credit bureaus and will delete this for you in less than 30 days. Cost is around $2000-$3000 I think. I know people who used her with great success.
Re: Does Chapter 13 Bankruptcy = REI Killer? - Posted by WALT-BRTN
Posted by WALT-BRTN on September 16, 2004 at 16:59:05:
BANKRUPTCY- dont do it !!! instead try to wholesale property and use the $$$ to pay off debt.(BRONCHICK HAS A BOOK ABOUT WHOLESALING AT BARNES AND NOBLE. (OR BUY A COURSE) ALSO READ ARTICLES ON THIS SITE ABOUT WHOLESALING OR FLIPPING. I feel bankruptcy is not a rei killer. however its a killer personally. when you are successful you are gonna want to buy nice things and your gonna need your CREDIT. I filed and if i had known then what i know now i would have increased my income and paid them off. 10k seemed huge then now i know its nothing in real estate income. If your able to flip you could make as much as $2500-$5000 a month. use this money to pay off debt and improve financial situation. DO NOT PAY TO CLEAN CREDIT. ITS A RIPOFF OR TEMPORARY AS MENTIONED ABOVE. obtain your credit report from each of the 3 bureaus and then write them each a letter using the phrase mentioned and clean up your credit for free and legally.
January 8, 2004
Experian
PO Box 9595
Allen, TX 75013-9595
Dear Sir or Madam:
I have identified the following as possible inaccuracies on my credit report. Please investigate them and inform me of your findings.
LIST CREDITORS AND INACCURACIES HERE !!
Thank you for your attention to this matter. I look forward to hearing from you soon.
That is the biggest ripoff I have ever heard of (I know, an exagerations). You have to be kidding me. If you have any knowledge on this, it is the creditor that determines whether an item STAYS off your credit reprot. My dead grandma can get an item off of a credit reprot; but within 30 days later if the CREDITOR deems it accurate, it will be placed back. So for 2k - 3k you can have clean credit for about four weeks.