chargeoffs listed after BK....mortgage denial...w/ good cred

[artists4animals]

:shock:

background:

filed for bk on 12/2000

discharged on 03/2001

 

denied mortgage on 5/01/2003

reason charged off on CR

 

all past debt included in discharge of bk on 03/2001

currently several excellent lines of credit over 2yrs including

mortgage on on land for 2.5 yrs....paid never late on all...

previous paid never lates during bk.

 

on the CRs if the account was included in the bk do they have a right

to list this info....amounts, dates, ect....or should it just read "included in bk"

"unrated"???

 

I have disputed these negative items with all 3 CRAs....so far only experian shows them under investigation.....Trans Union asked for the bk papers schedule F and discharge to be faxed to them....after reading a post on here not to do so I have not yet done that....is this correct? and if so why?

 

also on CR it si showing in the UPDated line current dates such as 04/2003 what the heck does this mean the creditors are still saying I owe?

 

now besides disputing this with the CR can I go direct to the creditor that has been discharged in the BK and strangle them it they are updating that I still owe them???

 

any ideas and help so so so appreciated....

 

btw I had to file Bk because I was out of work with a serious illness....10 months.. of fighting lyme disease...and all current accounts including small loans of $2,000 are all paid off never late....I did so to help rebuild credit...

 

and we own/ paying mortgage on 14 ac of land at $515 per month paid never late for 2.5 yrs.....

 

so I am guessing it is the CR that is listing the charge offs that are included in the bk that are ruining our chance of a mortgage?

 

how do I get them off and exactly what are they allowed to "show" on discharged bk accounts on a CR?

 

thank you so so much....I have learned quite a bit reading all the posts...I am no longer afraid to fight thanks to all of you!

 

cheryl

[cjsmom]

Ouch! You have me worried now!! :cry:

 

We're going to be trying to apply later this year when our lease is close to being up. Currently, Fleet and Discover are reporting "Discharged through bk ch.7/Account Charged off" on my experian report only. Actually, Discover only says "petition for ch. 7 bk/charge off".

 

Eq & TU just show "included in bk" for all of the accounts we filed on. Believe me, I've disputed SEVERAL times and have had no luck getting them to change that.

 

This brings me to what I asked another member about on another post just recently on Ex not removing info in regard to bk filing (lates after filing date). What do we have that specifically says what info they can or can't report once we've filed? They said they were able to get all other notations off and only leave "included in bk". I've even written to Discover and asked them to remove the notation of charge off and they said it was being reported correctly according to their records. I've also read on other boards (and one an attorney posts on) that supposedly the 'charge off" notation is just "part of their record keeping" and shouldn't pose any type of problem for us.

 

I sure hope someone has some solid help for you, (well, me too for that matter! :wink: ) I'm wondering if that truly was the reason for the denial? People on these types of boards have gotten several mortgage loans after a bk, even as soon as a year so I can't understand what happened unless they just have thier own standards etc. Have you shopped around first before applying? Does this company regularly do loans for people with less then stellar credit?

 

I'll be watching this thread! Please don't give up. I bet you can get a loan from a different lender. You've done everything right post discharge and rebuilt. Do you know what your scores were when you applied? Do these accounts also specify the bk notation? Something seems fishy.

 

Cjsmom

[700andSoaring]

As far as the "charge-off" notation, this might help you.

 

http://www.ftc.gov/os/statutes/fcra/lovern51.htm

 

I sent it to EQ and EXP as part of my dispute and now most of my BK'd TL's that used to say "...Chapter 7/Account Charged Off" now just have the BK notation. It won't help your scores, but it sure looks better when the lenders do a manual review of your reports.

 

Good luck.

[crofttk]

I agree wholeheartedly with 700andSoaring.

 

However, technically, that opinion letter should be balanced against this opinion letter:

http://www.ftc.gov/os/statutes/fcra/mccorkel.htm

 

My approach earlier this year was to supply complete BK7 documents, i.e., filing letter, Schedule F, and discharge letter, to all 3 CRA's and have all IIB accounts noted as "Included in Bankruptcy/Never Late". These accounts, pre-dispute, were, almost without exception, noted as either severely late or Charged-off.

 

Of course, this goes against the strategic advice you'll get on this board and others to NEVER give BK papers to CRAs because that does the work of verifying the BK for them that they are obliged to be doing for themselves and closes off potential deletion strategies.

 

That being said, I (in hindsight) felt my approach was justified because my BK accounts are due to roll off the reports in 1/04 and, since I was getting ready to apply for refinancing on my home, found it much easier to explain the BK and accounts included therein to a mortgage underwiriter than a bunch of lates and chargeoffs.

 

I've seen the statement many times that they HAVE to note a BK account as included in bankruptcy, closed, and $0 balance. But, I haven't figured out where that requirement comes from: FCRA, FCBA,ECOA,FDCPA, or Bankruptcy Code ??? I think the principle, in my case at least, is that filing a BK7 implements an "automatic stay" against any further debt collection activity. I think that reporting lateness and charge-off reporting, showing accounts open and with balances due is construed as "debt collection activity" and therefore can be found in contempt of the automatic stay or a judge's explicit order of relief.

 

However, the opinion letter I linked to above seems to imply that "Included in Bankruptcy/Charged-Off", in the correct circumstances, could be a legal notation.

 

So, in disputing items that should be IIB, I certainly wouldn't reference the permissibility of the Charge-Off notation, I would just say, "this is incorrect, that account was included in BK7/13 filed suchandsuch date !". Playing dumb at the right time is just as important as actually knowing the law and your rights !

 

Almost all my IIB accounts now say "Included in Bankruptcy/Never Late", like I asked for. However, as others will be quick to point out, with the Documentation that I provided to the CRAs, I may have a tough time getting the BK7 PRs deleted before the extra 3 years beyond 1/04 have expired.

 

My plan, after the accounts come off 1-2/04, is to dispute the BK7 PR notation at random intervals and for semi-random reasons, i.e., just put a challenge to the CRAs as to it's validity and see if they're just too busy or too lazy to actually verify the PR and end up deleting it. :wink: If that doesn't work, so be it, I'll "eat it" for 3 more years. At least I have (and know I still can) purchased and later refinanced a home at 2.5 years and 6 years after BK7.

 

HTH

 

P.S. BTW, we just paid all CC debts down to 5% level as a result of some cash out of the refinancing, so as soon as those payoffs work through our CR's, we also hope to be "700 and Soaring" (or at least "Cruising" !).

[artists4animals]

this is an example o fthe CR transunion has on it.....

 

CITI

ACCT#xxxxxxxxxxxxxx

>profit and loss writeoff<

 

Updated:5/2003 Balance $5311

Opened 06/1994 Most owed $5311 payment terms $0

Closed 02/2000 past due$4421 credit limit $5000

>status as of 02/2000: charged off as bad debt<

 

 

 

MBNA America

act#xxxxxxxxxxx

>included in bankruptcy<

updated 11/2000 balance $0

opened 11/995 most owed $5697 payment terms $0

closed 08/2000 past due $0 credit limit $5000

 

>status of 11/2000 paid or paying as agreed<

>in prior 31 months from date closed<

>1 time 30 days late<

 

 

Now with Equifax these same 2 accounts just say....unkown..included in bk.....although equifax is missing some accounts in the Bk

 

Now with Experian its reading pretty much the same as transunion....

 

are they allowed to show the amounts and other info...are the CRAs not just supposed to show "included in Bk" with no amounts..??

 

and I am guessing the mortgage company still thinks I am liable for payment to these accounts because it does not say included in BK

on 4 accounts......

 

ALL WERE DISCHARGED IN BK.

but how do I get them to remove the $ amounts and do they have to remove the other info and just enter...."included in BK"

 

and forgive my stupidity but does the updated of 05/2003 mean anything to the mortgage co???

 

oh geeze....I was busting my butt trying to make a good go of life and now this......should I just throw in the towel and live in a cave and forget a new home on the 14 ac?

[crofttk]

Here's a quicky reply. I am a 3 month newbie here, so keep your eyes open for possible corrections or further input from the "Senior Citizens" (That'll get a rise out of 'em )

 

The CITI is totally screwed and needs fixed. The MBNA looks OK with $0 balance due. (Was MBNA actually 30 days late ? MY MBNA payment was due 12/21/96. It became 30 days late on 1/21/97. I Filed BK on 1/29/97. So, this is the only IIB acct that now has a late, 1x30 days, notation in addition to IIB and I let it stand that way.)

 

If you can dig up your BK docs. to prove to the mortgage underwriter that this CR info is incorrect, you may be OK.

 

Got to run to Dr. Appt. Will ck. back on this thread later !

 

HTH

[artists4animals]

wow if the citi bank TL is off on the CR I am in a mess.....I have 5 Tls that were included in Bk that read the same way that were included in BK...

none of them reflect that....all just read as charge offs....and some as included BK and charge offs.....

 

and now I am guessing that CRs show liability for these BK discharged TLs...is this correct....

 

and I did make a little headway....called a TL that I have excellent record with since 1994 and asked that they remove a 30 day late from an account with them....and they complied...after the ditzy rep said no ..I went to the boss and handled it! one less blemish to worry about!!!

 

now to deal with the others.....

 

and "updated" means what? updates on some Bk TLs are 05/2003

can I force the CRAs to change dates?....and if so how....I am getting pretty wound up now.....I may just go for the whole enchilada and try to force them to delete anything that is screwed up on my CR.....glad I did not fax the BK papers to the CRAs....

 

heck they even had my mothers address as my own....and a friends that I stayed at while buying my land! geeze oh petes..how screwed up can it get?

 

thanks for all the ammo!

 

 

perhaps a good thread would be "playing with your CR after a BK"..I am going to keep on working at this regardless if I do or do not get approved for the new mortgage....CR was the only reason for denial....I was just too stupid to know how to read it....and what the heck it means...still learning.

thank you everyone!!

 

 

I even have a personal letter coming in from our current mortgage holder to verify never late...they do not report to the big 3 CRAs...another problem since we are missing this great TL on the CRs.

[crofttk]

I'll give this a point by point try with the qualification that, hopefully, I am being quietly supervised by others on this board who will speak up if I go astray:

wow if the citi bank TL is off on the CR I am in a mess.....I have 5 Tls that were included in Bk that read the same way that were included in BK...

none of them reflect that....all just read as charge offs....and some as included BK and charge offs.....

 

and now I am guessing that CRs show liability for these BK discharged TLs...is this correct...

They all should show NO liability. The debts were discharged and you are not liable so the TLs as shown are full of crap. Creditors are well known for abridging your rights by NOT updating the accounts for BK even though they were notified. You need to get these changed. My post above tells you how I did it but if you have the time, readreadread here and you'll see other more strategically advantageous ways of possibly getting all the BK stuff gone !

 

...and "updated" means what? updates on some Bk TLs are 05/2003

can I force the CRAs to change dates?....and if so how...

"Updated" in this case probably just means when the information was last supplied by the furnisher (OC or CA) or it can mean when you last disputed the account and CRA either verified or changed the TL for you. Little importance, UNLESS, for instance, there is no closure date shown that updated date can make FICO scoring calcs think you failed to pay bills last month ! FICO is hogwash in a case like this and really screws you up for no reason.

 

...I am getting pretty wound up now.....I may just go for the whole enchilada and try to force them to delete anything that is screwed up on my CR.....glad I did not fax the BK papers to the CRAs...

That's OK too, just make sure you readreadread and ask questions and review your plans with the skilled folks here. Use some of that energy to thoroughly search this board and learn there are plenty others in your situation who have posted here.

 

...how screwed up can it get?...

Just keep reading. Nothing will amaze you then.

 

...I am going to keep on working at this regardless if I do or do not get approved for the new mortgage....CR was the only reason for denial...

The info. I posted above about 3 TLs good for 2 yrs. after BK discharge is geared toward an FHA mortgage requirement (Ooops ! I must have written that elsewhere. Anyways, I think it's 3 good TLs spotless 24 mos. after BK7 discharge are what's good for FHA !). It may be you went full in on a type of mortgage you had no chance of qualifying for with a BK on record, regardless of erroneous lates and charge-offs. Consider posting questions here in the mortgage forum for better guidance on qualifying in your position. Talk to some brokers or lenders about if they have programs you would qualify for. I'm almost certain you'll find one you can honestly discuss your CR's with and help you get qualified. On my recent re-fi, I wrote a letter on reason for bankruptcy, supplied copies of the court BK docs. and gave them the whole packet I sent to CRAs disputing the charge-offs, lates, etc. that should have been shown IIB. After the underwriter reviewed all that, we were approved 5.375% (3 pts.) with no further questions and closed 4/23. Our broker was the same guy we used to purchase our home 7/99, 24 mos. out of BK7 discharge.

 

...I even have a personal letter coming in from our current mortgage holder to verify never late...they do not report to the big 3 CRAs...another problem since we are missing this great TL on the CRs.

Hang onto that for an underwriter who is willing and knows how to read.

 

Hope this helped and hope others can pipe up if I missed anything or goofed anywhere ! :wink:

[cjsmom]

Quote by Crofttk: "I've seen the statement many times that they HAVE to note a BK account as included in bankruptcy, closed, and $0 balance. But, I haven't figured out where that requirement comes from: FCRA, FCBA,ECOA,FDCPA, or Bankruptcy Code ???"

 

Exactly, I've always heard and seen the same advice on any message board I've visited but have never seen anyone quote the source. All of my accounts do have the bk notation with zero balances (all my disputes to get lucky and get deletions were fruitless) and our scores have steadily risen from the two years post discharge so it does make a big difference.

 

I think the Citi one and any others that this member has that aren't obviously updated are what hurt her mtg app and perhaps proving to the mtg company that they were discharged would help. She should have her bk schedules that show she no longer owes the debts.

 

If anything I'd also start the "not mine" disputes on all of these accounts if she hasn't already. They'll either delete or update it to reflect the bk status and her scores would be effected. Fleet updated our accounts to bk status but TU reported it as a charge off. Man did our scores plummet. As soon as they corrected it, we saw an immediate increase in the score.

 

Whew, now I'm not quite as worried. Thanks for all the good info and links! :wink:

 

cjsmom

[cjsmom]

As far as the "charge-off" notation, this might help you.

 

http://www.ftc.gov/os/statutes/fcra/lovern51.htm

 

I sent it to EQ and EXP as part of my dispute and now most of my BK'd TL's that used to say "...Chapter 7/Account Charged Off" now just have the BK notation. It won't help your scores, but it sure looks better when the lenders do a manual review of your reports.

 

Good luck.

 

How long ago did you try it with this? Sounds like it couldn't hurt to at least try it, I may give it a go just for the heck of it! :wink:

 

Cjsmom

[crofttk]

Quote by Crofttk: "I've seen the statement many times that they HAVE to note a BK account as included in bankruptcy, closed, and $0 balance. But, I haven't figured out where that requirement comes from: FCRA, FCBA,ECOA,FDCPA, or Bankruptcy Code ???"

 

Exactly, I've always heard and seen the same advice on any message board I've visited but have never seen anyone quote the source. All of my accounts do have the bk notation with zero balances (all my disputes to get lucky and get deletions were fruitless) and our scores have steadily risen from the two years post discharge so it does make a big difference.

...

 

Yep. Maybe someone here can point us to a reference or case law for this. If I ever run across the source of this, I'll post a note in the forum.

 

I just wanted to reiterate: Getting accounts updated quickly and accurately VERSUS getting them and, eventually, even BK PR deleted can call for two different strategies. Only the individual can make the decision which way to go for his/her self. Just make sure you're aware of all sides and the possibilities before you decide !

[SassyinAz]

This is a great thread!

 

However, this jumped right off my screen

 

artists4animals wrote:  

...how screwed up can it get?...

 

To which crofttk responded:

Just keep reading. Nothing will amaze you then.

 

croft,

 

That is the wisest, most accurate and concise, spot on response, I've ever read!!!!!!!!!!

 

LOL LOL, gotta love that.

 

Sassy

[GoreyGirl]

As per my earlier post (please someone, help me interpret my report!) we had our BK 7 discharged 4/29/03.

(T=Transunion E=Equifax)

Yet, FLEET BANK shows it as a charge off/bad debt with balance of over $7000 and late payment of $470 and also the following:

 

HOUSEHOLD BANK Credit Card

 

Credit Limit $2500 T No credit limit given on E

High Credit $2747 T

Description Chap. 13 Bankruptcy ALSO

as of 1/02 Charged off as bad debt Bal. $2747 Past Due $190

only on T

Current Status: Included in Chapter 13 -- only on E

 

Those Charge Offs look mighty bad. Also, Household is listing our $34,000 equity line of credit/secondary mortgage (take your pick) "Placed for Collection" and as of 2/2003 "Collection Account" with 0 balance.

 

When we were in BK 13 before converting to 7 the above account was ordered to be stripped down. As we gave up the house now and there are 2 mortgage companies ahead of Household, I don't know what is going to happen.

 

What does this all mean? It is so confusing.... :?

[crofttk]

GoreyGirl:

 

You're right, it looks and sounds complicated. However, as I assume ALL your debts were included in the BK7 I believe this simplifies things somewhat. If my assumption is correct, you have no remaining liability on the accounts. I'm no lawyer of course, just sharing my own BK7 experience and what I've been reading here.

 

The remaining complication most likely has to do with the fact that: 1) the CRAs usually do nothing but report what the OCs furnish to them with absolutely no effort to verify the info. They leave it all on the furnishers' backs, and 2) Even though the OC's were notified of your BK7, they could care less how they continue to report your account until you squawk and sometimes until you send an ITS letter.

 

Due to differences in data handling, the same furnisher can report to all three CRAs, either simultaneously or years apart, and still the TL can look totally different at each CRA. This is why it's a good idea to initially pull a CR directly from each of the 3 CRAs (There is a 4th, Innovis, but supposedly they aren't in on lender decisions as of yet and IMHO you can give that one a lower priority) to see what you have to attack through each CRA separately.

 

BTW, I found Fleet the most stubborn account for me and DW to get properly updated on our CR's ! Even now, DW's Fleet TL shows IIB on TU but there is no closure date so the TU FICO calc at myFICO.com for DW is much worse than it should be saying she has late payments in the last 3 mos. ! :evil:

 

Well, there's a piece of my Friday morning energy for you.

 

HTH

[GoreyGirl]

You did pretty good for early Friday morning! :wink:

 

Yes, I did order all 3 reports directly from each bureau, as posted by many people on various boards.

 

I just get the impression that some of these creditors are playing at being dumb, especially Household, whom we intend to sue for damages anyway. And if Fleet is as stubborn as you say, well, then it's lawyer time. Sometimes 1 letter from a lawyer can do wonders.

 

We did discharge everyone and the house in the BK. However, looking it over, we only owed Sears $104. Should have reaffirmed the debt and kept the card. However this was at a time when we were eating nothing but pasta because we couldn't afford much else. Also did not know anything about BK until it dawned on me to start reading what was on the Internet. Now we are much wiser.

 

Imagine having 24 years of excellent credit and within 1 1/2 years predatory mortgage lenders helped to toss it down the drain. The disputed mortgage with Household was the only creditor that we were ever late on, and that was because a lawyer took over the case and told us to stop paying them as it was in dispute. By that time, all our balances had run up really high using CCs for living expenses as the high predatory mortgage lenders were charging outrageous (and unjustified) rates. We charged stuff like food because the food bank was giving us items that were almost inedible. (A jar of salsa is nice but it's not that great right out of the bottle. And thin rice wafers are dryyyyyyy.

 

I digress. That's why the Credit Reporting system is so unfair. It looks like we were deadbeats but we kept paying everyone until we had to stop to start the BK process. In reality, these lenders drove us into BK. Yet no report can reflect this.

 

Thanks for your help. Gonna pull my hubby's today and probably then, as they say, the s--- will really hit the fan! :evil:

 

Have a great day

Sharon

[crofttk]

Good Luck !

 

Sure the creditors play dumb, they just hope we're as dumb as them and try to pressure us into paying debts that were forgiven !

 

I hear you on the BK experience. We've got our war story on that too. Even though the effects will never totally go away, we cope, we have our house, I have a job and am grateful for that. AND I'm grateful for a place to come and get help on coping without being judged (at least the support far outweighs any rare instances of judgmentalism !).