CheapDB

Hi all, Wondering if I can get some of your advice....I filed bankruptcy in 2010 and included my mortgage on the house. My partner and I broke up a few years ago, I moved out, yet he's still living in the house. There hasn't been a payment made on the house in about 3 years now, and he wants to try to Short-sale the house instead of letting it go to foreclosure. Note, the bankruptcy only included myself, and not my partner, although we both remain on the deed/mortage papers. My question is, aside from the benefits my partner would receive from the short-sale, are there any benefits that I personally would receive from the short-sale. Or could the short sale hurt me financially? I know the bank cannot come after me personally for any deficiency due to the bankruptcy (chapter 7). The short-sale lawyer is saying he would try to get us $3,000 in relocation incentives from the bank, but I think that is nominal after it's split up between the 2 of us, and if I have to pay taxes on this incentive, it would be even less. Note, this is NYS near NYC area, where renting and housing is expensive. Also, I do not see myself purchasing another home or real estate in the near future at all - I just don't have the resources anymore to make such a purchase. So do you think there are any reasons why I personally should go through the hassle of doing a short-sale instead of letting it go into foreclosure? I'm already stressed enough health wise, and don't need to the hassle of selling a house that I really don't care about at this point. Thanks for letting me rant a bit, and thanks in advance for any advice you may have.

This is sort of what we just did. Except our rate stayed the same. Ours was very quick and easy, after gathering and faxing all the paperwork. Took about couple months. As long as your income on your statements backup at least or more than what you told them on the phone during the pre-qualification, you should be fine. I think the horror stories are mostly during cases in which the bank is resistant to losing a lot of profit by reducing principle or substantially lowering the interest rate over the life of the loan. In your case, they are basically getting back every penny that they lent you, so it is in their best interest to quickly make you an offer and timely process your case.

A paid charged off is viewed the same as a non-paid charged off as far as credit goes. the only thing you'd really gain by paying is eliminating the collection calls and avoiding any possible legal action in the future. Unfortunately, what Amex did not make clear to you was how much you had to pay at the beginning to avoid the account being canceled and/or charged-off. I think they have to legally charge off the account after so many days past due (around 6 mos or 180 days). Apparently, your hardship program payments were not high enough to reverse the count down.

All good advice above. You have to reminder though, most lenders are not willing to work with you unless you are already serious behind on the payments when you speak to them. The mortgage company will likely not give you any forbearance on mortgage payments unless you are already a few months behind - which alone will tank your score more than any late on a credit card will do! I do not recommend falling behind on the mortgage just so you can try to pay the credit cards. Mortgages are not as easy to catch up on - especially if you do not have enough surplus in your net monthly income to handle a larger mortgage payment if they add the past due balance on your the current payments/loan through a modification. The credit card companies for the most part will not consider you on a hardship plan or workout agreement unless you are already several months behind on the accounts. If you want BOA to lower the interest rate, you likely need to be seriously default on the account.

If you used a lawyer to file, they would be able to tell if you if it was discharged or not. I'm willing to say with 99% certainty the fines were not discharged. therefore, unless he ever paid the fine, the bench warrant is probably still active.

Responsible people would not use a credit card to carry a huge balance, knowing that the rate can be changed at any time as per the terms given when the account was opened. It should not be a shock that these things happen. If you want to finance something at a fixed rate and not worry about varying interest rates, then a fixed-length personal loan would be the appropriate product. Why is carrying a balance irresponsible? If you have a reasonable expectation of paying the loan off in the certain amount of time with a certain interest rate there is nothing wrong in carrying a balance. The banks have a responsibility to price their products as per the creditworthiness of the borrower - it's when they f*** up and misprice do you have situations like Citi raising interest rates to 29.99% for a wide swathe of borrowers. I didn't say it was, I said that you should carry one on a fixed repayment plan if a rate change would be a significant problem for you. Look, I intentionally made my post short to avoid dragging this out. I financed a house with a mortgage (30 year fixed, so there can never be any surprises), but I would never pay interest on a credit card. Yes, it is crappy of banks to jack rates, but they were well within their rights no matter how you feel about it. Just agreeing with Nummerkins. The way the banks design CC accounts, they are really only fit for carrying a balance if you DO NOT use the card again until the balance is paid in full - pretty much like an installment loan. If you continue to use a card before the balance is paid off, then you fall into their trap and end up with perpetual payments - possibly for life. Before you know it, when something financially traumatic happens, you find yourself struggling to make the $200 minimum monthly payments on a $10,000 revolving balance. It's ridiculous if you look back and see that most of that balance is actually attributable to finance charges rather than purchases. I don't think the new credit card act went far enough to stop the banks!

When you say "we", I assume you mean your two parents. If your parents filed Chapt 13 in 2008, they are likely still in the bankruptcy until 2011 or 2013. You will not likely get any mortgage lender to lend you in your current situation. If your family cannot afford the home, you should really consider renting another more affordable home. You may be able to find a private party to rent you a house. Otherwise, I would suggest you do whatever you can to avoid the foreclosure.

I think charging off is required by federal regulations to most banks (not sure about credit unions though). It's they're way of disclosing bad debts in their accounting records. It doesn't mean the debt disappears though, as it can remain on their books collecting interest and fees and they can continue to attempt to collect the debt. It simply means the bank does not believe the debt will ever be repaid. reporting of charge-off must be done timely, and it is usually done after 180 days of delinquency due to not paying at least the minimum balance due. if you make partial payments, it can take longer than 6 months for this to happen. the clock starts ticking once the account is delinquent and it doesn't really restart until the account is brought current. So, to answer your quesiton, pay 1 month just extends the deliqency period 1 month and not the entire 180 days again.

Any collection agencies reporting accounts that were discharged in your bk are in violation of federal bk laws. if they don't respond with a simple dispute/verificaton request throught he CRA, you can threaten to sue them if they don't remove all of their account information. If it the account was not with them before you filed, then the original creditor is also in violation of the law by selling the account to them. The original creditor was supposed to report to the CRA the account was included in bk on or before your discharge date. Also, the most interesting thing you pointed out though is the student loans being in collections. Students loans are near impossible to get discharged in a bk (either 7 or 13), so they may actually be ligitimately in collections. If you filed a chpt 7, you were probably supposed to continue making payments on the student loans after your discharge date. If you have not been paying them, they will come back to haunt you for dear life.

How true! I watched a recent documentary a few months back that was interviewing lending practices by Bank of America. The loan officers openly stated they really like people who have "bad" credit in some form or fashion because they are the most profitable. BOA likes account holders that carry a balance and get to the brink of defaulting, but don't. They way, they get a customer that provides purpetual payments of the maximum amount of interest and fees to them througout their life (basically), or as long as the keep the account (open or not).

Care Credit is a credit card from GE Money Bank.

No and No. Paying a debt that was included in bk is basically like just voluntarily "giving" the bank money, since the balance on the account is legally "0" if it is discharged. It is also illegal for any bank to make an attempt to collect a debt that is discharged in bankruptcy. Never understood how the concept of "blacklisting" by some banks such as Amex evade this law though. Also, there is no tax obligation on voluntarily paying the charged off debt either. If anyone was to get a 1099 though, it would probably be you giving one to AMex since they are essentially gaining income for debt that they were supposed to charge off their books years ago when it was discharged.

I know some are averse to credit cards (and that's perfectly fine with me). But seriously? Gdtobefree, I sincerely hope that it was a case of miswording, as opposed to an attempt at the egregious. There was no such thing as credit cards as we know it today in the 1900's. Cash was not the one and only currency used everywhere and there was credit in the 1900's - I'd go as far as to say that the United States didn't even stand a chance of existing if credit was a nonexistent concept. Credit existed in the 1900's, but I think it was very rare for folks to go to a restaurant and charge a dinner. Credit was, for the most part, used to make very large purchases that were difficult to save for, such as a house, land, etc. The concept of going out and charging a dinner at a restaurant is a concept that arose much later. I do agree though that we definitely need credit. We need it to finance homes, cars, businesses, or other major necessities/investments. However, we certainly don't need it for small things/luxuries such as eating out at a fancy restaurant. This place is probably looking for publicity and the banks may be offering them some sort of major discount/kick-back on the merchant fees for accepting the credit cards.

It is always cheaper and easier to deal with cash than credit for both the merchant and the consumer, especially at this restaurant's high prices. This place is obviously just trying to reach some kind of ridiculous quota to gain some sort of serious kick-back from the credit card companies/banks. Plus, they are getting free publicity out of it too.

Amex is well regarded by some simply because they have had excellent marketing over the years that placed them as an "exclusive" credit product to the public. They had to do that simply because they had to distiguish themselves from VISA and Mastercard, whom definitely almost obliterated them from the industry. Just like they did to Diner's Club whom was eventually sold to Citibank. Now that they are chartered out to the other banks, this image will be hard to maintain, as they'll be seen as just another credit card like VISA and Mastercard cards.