Monday, July 20, 2015

Bankruptcy - mortgages and rebuilding credit - a brief conversation with a banker ...

In time, there is credit after bankruptcy ...
          and it may be shorter than you think ...
Image courtesy of digitalart

As some people who know me know, I am an adjunct professor at DeVry University at the Philadelphia campus and also with Keller Graduate School of Business. I just started a Keller course this session. One of my students is a branch manager for Wells Fargo. He told me he has been involved with both mortgage lending and retail banking. I had the opportunity to talk to him about bankruptcy and rebuilding credit.

I tell my clients, generally mortgage companies will make some things difficult for them if they do not reaffirm their mortgages but will not attempt to take their home as long as they are current on their payments.  Mortgage companies cannot foreclose on a home loan that is being paid in accordance with the loan agreement. But that doesn't mean they have to make it easy for the homeowner and I heard of debtors having real problems trying to refinance their home loans with their mortgage companies. My student admitted Wells Fargo does not refinance mortgages that were not reaffirmed. He also agreed that it doesn't prevent other mortgage companies from lending to the same homeowner when their credit score increases enough to permit the refinancing.

We also spoke about credit building after bankruptcy. I tell my clients it will take a couple years. He told me it can be as short as a year to normalize credit. We spoke about secured credit cards. He told me Wells Fargo's lowest limit secured credit card is $300. He also talked about applying for a small secured loan 6 - 9 months after discharge, which the lowest amount Wells Fargo will lend is $3,000. He doesn't recommend using it; just borrowing it and paying it back over time. The bottom-line of our conversation: the biggest factor to rebuilding credit after filing for bankruptcy is paying all your bills on time.

While none of this information was really new to me, it was nice to talk to someone in the banking and lending industry. It is always comforting to find people who have information to support what you believe. In time, there is credit after bankruptcy.

If you want assistance, legal representation, or just want to know more about Mark Medvesky or Medvesky Law Office, LLC, check out our website at

#bankruptcy #Chapter_7 #Chapter_13 #Montgomery_County #law_firm #Bucks_County #Pennsylvania

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