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I am trying to get approved for an FHA loan on a new home and I'm having issues with an old bankruptcy (BK) case I filed several years ago while trying to avoid foreclosure. I lost my job due to outsourcing and eventually did let my home go to foreclosure, but enough time has passed and my credit is improved enough for that not to be an issue. That was July of 2006, and at that time my attorney told me I did not need to continue with anything in the Chapter 7 case because I was letting the house go back, and it was the only thing I was filing against. He said the case would just be dismissed if we did not follow through on anything. I trusted his advice, and as I have seen credit score improvements over time that made sense.

Now, in trying to get approved for the new loan for some crazy reason after several months and years even a Motion For No Discharge was just filed by the courts just last month and is now showing on my credit. The credit bureaus are showing the cased as discharged, which is not the case, and I have the paperwork to show as much. I have no idea why it took so long for things to be dismissed, but my question is since if we get this changed to a dismissal instead of a discharge will that be enough to allow my approval per FHA requirements? My mortgage guy seems to think so, but as he's never experienced this before he can't be sure.

I've read through the forums, and I've seen many answers to timelines on discharges, but this is a dismissal and I have been already been cleared of the debt I was filing against years ago, and it shows this to be true on my credit report already. Please advise if anyone knows if having it be a dismissal instead will help me.

Thanks!

Niicss · Posted: Mon Sep 28, 2009 2:15 am Post subject:

As far as I know, bankruptcy discharge is a better option than a dismissal. If your debts are discharged, it means that the debts have been legally eliminated. Thus, the debts are no longer legally enforceable against the debtor. However, a secured lien may survive the bankruptcy case. On the other hand, dismissal is the termination of the case. After a case is dismissed, the creditors have the rights to sue the debtor for the dues. I think it would be a better option if you can contact your bankruptcy attorney and take his opinion in this regard. Moreover, you should remember that you cannot simply change your "discharged bankruptcy" into a "dismissed bankruptcy".

Guest

The problem is that I have no debts that need discharged anymore, and that's why I/we did not continue with the case. I received a "NOTICE OF NO DISCHARGE" paper from the bankruptcy courts, which to me, and my attorney, that this was obviously not discharged. For some unknown reason though the case IS showing discharged on my credit report. I would love to have the thing actually show dismissed because I do not need to have the protection that a discharge would grant me because the only item I filed against has long since been settled.

The issue is not changing it to "dismissed bankruptcy" from "discharged bankruptcy", but to actually get the courts to show on my credit report that it is truly dismissed like the papers they have sent my attorney say.

Any suggestions?

Guest

Send a copy of your letter to the credit beaurus. Problem solved.

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Difference between BK dismissal and discharge?