Re: Chapter 7 versus Chapter 13

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Posted by Christine Baker on October 17, 1998 at 20:25:32:

In Reply to: Chapter 7 posted by Sandy Sparks on September 29, 1998 at 19:28:03:

: Please explain about Chapter 7 and what is it used for?
: Credit Card debt or mortage?

Chapter 7 bankruptcy DISCHARGES your debts such as credit cards and other UNSECURED loans.

Your mortgage is secured by your home, so it can NOT be discharged. Also, some department stores like Sears secure your charges with the merchandise you buy and they *MAY* want merchandise back when you file a Ch. 7. And of course you can't discharge your auto loan, they'll take the car back.

A Chapter 13 includes home and auto loans and you make payments.

Consult with a bankruptcy attorney, take a list of all your debts, many offer free initial consultations. Attorneys make MUCH more money on a Ch. 13, so be sure to explore all alternatives before filing a Ch. 13 bankruptcy.

And of course, be aware that you can FORGET about buying a house until 2 years AFTER you're done paying on the Ch. 13, while you may qualify for an A paper mortgage as soon as 2 years after a Ch. 7.

There is NO appreciation for paying your debts, but that's life in America .... The lenders conclude that you must be pretty dumb and subsequently a greater risk when you pay your debts instead of discharging?

Any explanations from somebody in charge of underwriting guidelines for a major mortgage lender, FNMA or FHLMC would be greatly appreciated!

Christine

Bankruptcy and CCCS

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Comments:
: : Please explain about Chapter 7 and what is it used for?
: : Credit Card debt or mortage?

: Chapter 7 bankruptcy DISCHARGES your debts such as credit cards and other UNSECURED loans.   

: Your mortgage is secured by your home, so it can NOT be discharged.   Also, some department stores like Sears secure your charges with the merchandise you buy and they *MAY* want merchandise back when you file a Ch. 7.   And of course you can't discharge your auto loan, they'll take the car back.

: A Chapter 13 includes home and auto loans and you make payments.

: Consult with a bankruptcy attorney, take a list of all your debts, many offer free initial consultations.   Attorneys make MUCH more money on a Ch. 13, so be sure to explore all alternatives before filing a Ch. 13 bankruptcy.

: And of course, be aware that you can FORGET about buying a house until 2 years AFTER you're done paying on the Ch. 13, while you may qualify for an A paper mortgage as soon as 2 years after a Ch. 7.

: There is NO appreciation for paying your debts, but that's life in America ....  The lenders conclude that you must be pretty dumb and subsequently a greater risk when you pay your debts instead of discharging?

: Any explanations from somebody in charge of underwriting guidelines for a major mortgage lender, FNMA or FHLMC would be greatly appreciated!

: Christine


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