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27

Nov 2010

Bankruptcy, Mortgage Companies, Your Credit Report Code Q

Posted by / in After Bankruptcy / 65 comments

On your after-bankruptcy credit report, your mortgage is the account most likely to be wrong.  What the mortgage companies do is far worse than HSBC (see my Nov 22, 2010 blog).  HSBC just parks your late status and doesn’t update showing bankruptcy.  The mortgage companies often update every month, saying you are late and getting later.

This leads me to two questions.  Why are they doing this?  And how?

The credit bureaus promised the judge in the Terri White class action they wouldn’t allow this.  They promised to block creditors from updating late accounts  after bankruptcy.  (The exceptions are things the bankruptcy doesn’t clear up–like child support and taxes.)

So how are they getting away with it?

The answer is in the credit reporting instruction manual, published by the three credit bureaus.  The manual, called Metro 2, includes about a dozen codes for bankruptcies.  Chapter 7, chapter 13, discharged, dismissed.

One of those codes, Code Q, means ignore the bankruptcy.  We’re seeing mortgage companies report a code Q–ignore the bankruptcy–to the credit bureaus.  And then they start reporting people late again.  The credit bureaus are using that code Q as their reason (or excuse) to let the mortgage companies keep up late reporting on debts that were cleaned up in the bankruptcy.

But why?  It doesn’t make sense.  I can understand HSBC parking a three thousand dollar credit card on your credit report.  Three or four years after the bankruptcy, especially if you’ve lost contact with your lawyer, you might go on and pay it to clear up your credit.

But nobody can afford to pay a $100,000 mortgage to fix their credit.   Can they?  (Recently I had a client call Bank of America to complain about a mortgage still showing a past due balance after bankruptcy.  And Bank of America told her, “now that the bankruptcy is over you still have to pay.”)

So maybe they think they can hammer people into making payments when they don’t have to, just by continuing to hit their credit.   (Even if only one person out of ten thousand does it,  they’d come out ahead, since it basically doesn’t cost them anything.  Unless they get sued for it)

I’ve sued on three of these cases so far–got the after-bankruptcy credit report fixed and got people a little money.   My clients were happy to settle for that.

I have another one of these cases going now–and my client is really hacked at her mortgage company.  (She works in the finance industry and knows how much this hurts.)   So I hope we can keep the case going a little longer–long enough to make the mortgage companies explain what they think they are doing.

When I find out, I’ll post it here.

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Robert Weed has helped twelve thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

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65 comments
  • Laura M. Jones

    November 29, 2010, am30 8:44 AM
    01

    Thanks for this post. I had no clue about code “Q” and I am very knowledgeable about credit reports. Thanks for the lesson! That is why I continue to read your post’s, I learn something everytime!

  • Robert Weed

    December 5, 2010, pm31 8:32 PM
    02

    Here’s a link to a Code Q example.
    http://robertweed.com/blog/wp-content/uploads/2010/12/Code-Q-Pages-from-violation-samples.pdf

    The mortgage company ignores the bankruptcy and goes right on hitting the credit report.

  • Joshua Ramsey

    December 17, 2010, pm31 3:11 PM
    03

    Thanks for this quick insight! I was denied a mortgage in February because my bank continued to report late payment for 14 months about my bankruptcy was discharged. I called them today to start an “investigation”; I’ll be opening disputes with the credit bureaus shortly. I have this article bookmarked in case I need your services.

  • Teresa

    April 12, 2011, pm30 9:40 PM
    04

    Wells Fargo has reported me 120 days late for almost 5 years during a Chapter 13. I disputed and also contacted the CEO office. I received a letter stating their policy was to keep reporting the mortgage late even during bankruptcy – that was until they changed their policy in October of 2o10.
    I read in your blog you sued and won. I have cleaned up my credit since my bk was dismissed – all but Wells. I would like to know how to get a case started and I’m sure I’m not alone with them! The almost 5 years of 120 days has trashed my credit I think worse than the BK!
    Please contact me at the email address I provided.
    Thanks!

    • Robert Weed

      April 19, 2011, pm30 6:15 PM
      05

      Where are you located? What state?

  • Tammy

    August 23, 2011, pm31 3:03 PM
    06

    My husband has this exact same problem with BOA and Experian presently. My credit report says “discharged in chapter 7″ and his says “open, past due . . . .” Please post any updates you have or let me know how we can get this corrected. I have disputed it twice through Experian and they say that BOA has verified it as correct information. What rights do we have or what can we do?

    • Robert Weed

      August 24, 2011, am31 6:30 AM
      07

      You need a credit report lawyer. Go to the National Association of Consumer Advocates–NACA.NET. You’ll find a lawyer who will be glad to take them on. Go get ‘em!

  • Amy

    August 28, 2011, am31 9:32 AM
    08

    Our chapter 7 BK was almost 7 years ago. We sent them an affirmation, they returned it too late, which as I read is probably a good thing. Chase Home Finance has reported us for the last 5. We originally were making payment on time and kept up with the mortgage, but have since fallen behind. I also have tried 4 mods, paid all the initial money down, etc. but have never had one completed due to being passed around to various employees. They have not sent “the foreclosure” papers yet, but am expecting them some day. Is it possible to sue them for the credit reporting issue and/or mod failure? Please advise as I take your knowledge to heart. Thanks!

    • Robert Weed

      August 28, 2011, am31 10:00 AM
      09

      As to giving you the run around on loan mods, you’d get no where in court with that in Virginia, which is where I am. Some states may have state laws and friendlier judges, I don’t know.

      As to credit reporting, if they are now reporting you as late or something, that’s a violation. It should just be showing bankruptcy. (And if it’s been seven years it should be about ready to drop off your credit report altogether.)

      But you cannot go after them unless you first dispute it–and you have to dispute with the credit bureaus–sending a copy of the dispute to Chase. That may fix it; if it doesn’t, you need to find a Fair Credit Reporting lawyer in your state. A good place to look is the National Association of Consumer Advocates.

      (You might already have the right to a very small recovery against the credit bureaus under the Terri White bankruptcy credit reporting class action. But that’s all tied up with some lawyers wanting to settle for peanuts–arguing it’s better than nothing. And some lawyers want to fight it out. I wouldn’t hold my breath.)

  • Bob

    September 27, 2011, am30 8:31 AM
    10

    I had a bankruptsy 2 years ago. I reaffirmed on my mortgage at Wells Fargo. Since then i have gotten an Experian credit report. Wells Fargo shows they were included in the bankruptsy, and have not been reporting my mortgage payments for the last 2 and a half years. What can i do about this, and is this legal? I live in Indiana.

    • Robert Weed

      September 27, 2011, am30 10:41 AM
      11

      Are you SURE you reaffirm your mortgage? Have you asked your lawyer to be sure? Reaffirming a mortgage in this market would usually be a very bad idea–except it should help your credit. Many courts won’t allow it. So, I’d start there and be sure.

  • Nancy Rogers

    November 20, 2011, am30 11:45 AM
    12

    I filed Chapter 7 a year ago, asked Wells Fargo to reaffirm on mortgage they declined, at that time I was on a payment plan to remodify my loan, a month after bankruptcy my remod went through and they do not report my payments to the credit bureaus at all, it states bankruptcy next to my mortgage. Do they not have to report my payments, they are telling me since I filed bankruptcy they are not allowed to report a on time payment or a late payment. I live in Michigan. Thank you.

    • Robert Weed

      November 20, 2011, pm30 2:52 PM
      13

      Right, since you filed bankruptcy, they should NOT be reporting your payment on your credit report. Your credit report should show the mortgage is being discharged in Chapter 7 bankruptcy, even if you are still paying. That’s because you can move out and any time and owe them nothing. Don’t know where you are in Michigan, but I do know that in a lot of places values have dropped A WHOLE LOT. The right to move out at any time and not owe them any money then, is very valuable. If your credit is a little worse because your payments don’t show–I think that’s a small price to pay.

  • Nancy Rogers

    November 21, 2011, am30 7:31 AM
    14

    That is exactly the situation I am in, I owe $34000.00 more then what my home is valued at. If I stop making payments how long to I have before I have to vacate the home and will I ever be able to qualify for a mortgage again?

  • Susan

    November 30, 2011, pm30 5:10 PM
    15

    Nancy’s situation is a little like mine, but I intend to stay and keep paying my mortgage. My Chapter 7 was over 6 years ago, and I’ve never missed a mortgage payment. My mortgage company tells me they’re reporting the mortage as current and active, yet it shows on three major credit bureau reports as “discharged/closed”, as if I have no real estate loan at all. What is my recourse to get my mortgage on my credit report? I also had an auto loan at the time of Chapter 7…that’s being reported as current and active…so why isn’t my mortgage?

    • Robert Weed

      November 30, 2011, pm30 5:19 PM
      16

      Sorry, I agree with the credit bureaus on this.

  • Joey

    December 3, 2011, pm31 10:50 PM
    17

    @Robert or anyone curious to know. My BK just discharged 3 month ago, so I had my credit checked. I noticed my BOA mortgage is showing BKPET with a 0 balance with experian. Now my realest trade line on the credit is showing 0 owed on real-estate. When in fact, I’ve never been late or past due. Still now receiving current statements. Suggestions ?

  • Justin Camper

    December 14, 2011, am31 10:13 AM
    18

    Robert, is it when the BK7 is filed or discharged that the mortgage company is not suppose to report any late payments on the loan to the bureaus? I believe it is from discharge date but a realtor I know is telling me from file date.

    • Robert Weed

      December 14, 2011, am31 11:01 AM
      19

      Filed date. The discharge relates back to the filing. At least in my view. I’ve had a bankruptcy judge tell me the discharge date.

  • Grover

    December 20, 2011, pm31 8:35 PM
    20

    Long story short my wife reaffirmed the mortgage but I discharged it, but everytime she’s late it shows on transunion and experian, but my equifax is showing IIB I disputed them on my credit report the mortgage company verfied, do I have a case against the mortgage company? I’m in kansas

    • Robert Weed

      December 21, 2011, am31 6:34 AM
      21

      Yes, you have an FCRA case against the mortgage company, and also against TU and Experian.

  • crystal

    January 17, 2012, pm31 3:04 PM
    22

    In our situation we filed bankruptcy 11/29/2008 and it was discharged 03/07/2009. We let the home we owned go in bankruptcy. We are now trying to buy my father in laws home from him. The company we are working with is now requesting that Bank of America send us a letter (yeah right) that the home was included in bankruptcy as BOA has listed on our credit as bankruptcy 03/09 and also foreclosure process started 03/2009. We moved out of the home in November just before we filed. Can they report on our credit? I spent 2 hours on the phone with BOA and have gotten no where. I understand that they had to follow the proceedings in order to get the title back in they’re name from when we left the home but how can they place any negative info on our credit report after the bankruptcy? We are in Missouri.

    • Robert Weed

      January 18, 2012, am31 10:11 AM
      23

      Keep us posted. I think the problem is when did BofA actually foreclose? How long has the house been out of your name? I try to tell people do NOT move out–do NOT move out–until there’s been an actual foreclosure. But some people move first and talk to a lawyer second.

      What I understand–and some people have said there are ways around it–you cannot get a loan tunil three years after the BK was discharged–that would be March coming up. and also three years after the actual foreclosure. Which is what you need to find out.

  • Melissa

    January 23, 2012, pm31 2:54 PM
    24

    I live in Wisconsin and since my ex-husband wanted the house, I quit claimed the house to him in December of 2007. Unfortunately, he let the house go into foreclosure several times. The first time (2008), I tried to help him save it by doing a modification. He was doing well with that but decided with the amount of debt I had, I would file bankrtupcy and absolve myself from the home completely, just in case. In 2009, I filed for and was granted Chapter 7 bankruptcy in November of 2009. The second time (2010), I contacted the law office handling the foreclosure and told them I was granted bankruptcy and also quit claimed the property. They asked me to file another QC deed, which I did. The case was ultimately dismissed. The third time, in December of 2010, I (along with my new husband) were served with foreclosure papers. I filed an answer stating I quit claimed the house in 2007 and was granted bankrtupcy in 2009. To date, the case continues with both my current husband’s and my name as defendants. Just this month, my husband and I were talking about possibly buying a house so I ran my credit report to see what’s on it. To my shock, the mortgage company is still reporting monthly and has been doing so for the last 2 + years. They are the only company that did not report the discharge at all. I’m wondering what my options are. Could you please give me some insight on this?

    • Robert Weed

      January 23, 2012, pm31 3:14 PM
      25

      They are definitely not allowed to be reporting the mortgage late after the bankruptcy. I don’t know where you are in Wisconsin. Was your bankruptcy judge, Judge Sue Kelly? I think you’d have a chance that she would rule that hitting your credit report is a violation of the bankruptcy discharge. Otherwise, you’ll need to do Fair Credit Reporting disputes and then sue if that doesn’t fix it. You can look at NACA. http://naca.net/. for lawyers in your state who do credit report law.

      Sadly, I’m not surprised that there is still no foreclosure. I tell people when I can–live for free as long as you can and don’t move out until you know it’s foreclosed. (If you are getting divorced and remarried though, that advice doesn’t work so well.)

      If you and the new husband are going to buy a house, I think it will have to be solely on his credit. You can’t buy a house as long as the old one still have a mortgage in your name. (Even though the credit report should NOT show it, there still is a mortgage in your name until there’s an actual foreclosure.) and for a couple years after. But talk to a lender in your area and see what they tell you.

  • Melissa

    January 24, 2012, am31 12:16 AM
    26

    Thank you for your response. I did not think they could do that and I still can’t get over the fact that they have been reporting it the entire time. They made absolutely no notation about the bankruptcy whatsoever and just continue to keep reporting negatively about how much is owed each month (takes about 1 page for all their notations). I do not owe this debt any longer so I’m at a loss to understand what they are trying to do.

    In answering your question, my Judge was James Shapiro, Eastern District of Wisconsin. I am teetering between writing to the foreclosure attorneys again, informing them of their client’s violation or just hiring an attorney and going straight to court on this matter since this has been going on for 2 + years now and how many times do I have to say something? I have told the foreclosure attorneys on two occasions, the second by actually filing an answer to the foreclosure, about the bankruptcy, and it is also noted in the court record I was granted bankruptcy, yet nothing has been done. The case has been pending for a year and my ex is still trying to obtain a loan modification so who knows how much longer this could go on. I’m curious to know what the court would do for the violation, a slap on the wrist? A fine? Is it worth bothering the court over?

    My husband has set up an appointment for tomorrow to talk to a lender and see what our options are as far as becoming homeowners. I’m keeping my fingers crossed but not holding my breath.

  • Frank White

    January 24, 2012, am31 10:10 AM
    27

    Robert,
    I see that you have provided some great advice for others, so maybe you can help with my questions. I have BOA mortgage modification which started at 2% I/O and is now at 3.5%. I also had a Chapter 7 BK discharged in 2008. I have not been late for the past 27 months on my mortgage and have paid $54,000 in I/O payments to BOA during these 27 months, however in my case the 3 credit reporting agencies have me reported as a zero balance and has not been reported by BOA at all. Of course i am upset that i have paid these much and it is not reported. I live in CT and would like to know my options. I have spoken to BOA several times and they always say it’s being report, but is clearly not being reported.

    1. Do you think they will report if i stop paying? this is not my intention to do so but would like to know?

    2. Do I have a case for legal action/lawsuit?

    any insight would be great.

    • Robert Weed

      January 24, 2012, am31 10:30 AM
      28

      You may not like it, but I think they are reporting you correctly. The bankruptcy should be the last report. They should not report if you pay; and they should not report if you don’t pay.

  • Frank White

    January 24, 2012, am31 10:52 AM
    29

    Thanks for the fast response. I was thinking that was the case. However, do you think they would be quick to take legal action against me? I work for a very large if not the largest bank in the world and work with defaulting homeowners all day long. I see some people not pay for more than 3 years without us taking legal action. I know i can play the legal game with them for a few years if i really wanted to and never have the house go into foreclosure.

    If possible i would like to speak via phone, what would be the best number to reach you on?

  • Tina

    February 29, 2012, am29 9:51 AM
    30

    I am going through a credit reporting myself. My husband and I filed Chapter 7 in 12/08 that was discharged in 3/23/09, including our conventional mortgage. The stay was lifted and foreclosure proceedings were started on 3/17/09. Both Equifax and Trans Union are reporting “included in bankruptcy” however Experian is reporting “Foreclosed” on the status line of the account. I am in the process of applying for a FHA loan now and they are requesting a letter from Wells stating the status of the account is “included or discharged in bankruptcy”. Wells has been telling for the last 45 days that yes my credit report should state IIB however I cannot get anyone to put it on letterhead. I have also electronically disputed this with Experian directly and they changed from Foreclosure proceedings processed to foreclosed. HELP me please. I am located in Virginia.

    Thank you,

    Tina

    • Robert Weed

      February 29, 2012, am29 10:05 AM
      31

      Where in Virginia are you? Who was your bankruptcy lawyer? this is why I check this for all my clients–so it gets fixed before it’s an emergency.

  • Tina

    February 29, 2012, am29 10:11 AM
    32

    I live in Stafford and Tommy Andrews was my lawyer. I wish I had been a little more selective when looking at attorneys now. Thanks for responding so promptly.

  • Tina

    February 29, 2012, pm29 12:18 PM
    33

    Robert
    I am finding so many different answers. Am I able to go back to my attorney now a couple years later.

  • Tina

    March 1, 2012, am31 10:49 AM
    34

    Robert
    Will you be able to answer my question?

  • DJ

    March 19, 2012, am31 1:58 AM
    35

    Hello Mr Weed,
    I sure wish you were our lawyer. You are worth 10x more than what we paid ours…lol
    I have pretty much learned all of the answers to my questions here, but I have a twist. My husband and I filed for BK in 2009, which was discharged including our 1st with Chase and our 2nd with Ocwen. We had no idea Chase was going to offer us a remod, we were packing and waiting for our foreclosure notice. We were also unaware that since we accepted the remod terms with Chase, we would eventually have to deal with Ocwen. We were under the impression from our lawyer that Ocwen was done with, no matter what. Completely clueless. During the past 2 years, Ocwen has been sending us “informational” statements and then they sold the debt to Litton Loan Servicing and Litton started sending us actual bills. I placed a phone call to Litton and told them this debt was written off in a CH 7. Next thing we know, Litton sends us a letter and informs us that Ocwen was our “new” lender on this loan. We just ignored it thinking they were just being annoying. We called our lawyer each time and they assured us all was fine. So we go to prequal with a lender last week to buy another house and they kindly inform us that there is a 180 day late from Ocwen on hubby’s credit through Experian. It is the same debt with a new account number (and a Q :) ). We put in for a dispute, but from what I am reading on here, we are in for a nightmare to get it removed. Anyway, yesterday we received a letter from Chase telling us that our home loan has been sold…..to Ocwen. Hahahaha What are they up to? I have an idea, but I just want to hear it from someone other than our lawyer. I want to thank you so much for this site. The information contained here is just priceless.

    • Robert Weed

      March 30, 2012, pm31 3:27 PM
      36

      DJ:

      Sorry I have taken so long to answer you, here. I’ve wanted to give you some good advice, but I’m not sure I have any. At least not on any way to avoid the “nightmare” on getting your credit report fixed. sorry.

      If you end up losing that loan, it would be nice if there is someone you can sue. So, here goes.

      When Litton started billing you again, they violated the bankruptcy discharge. You can sue them in the bankruptcy court for that. You and your lawyer would get something. Most bankruptcy judges won’t give you much for that. (Sounds like you need a more aggressive or diligent bankruptcy lawyer than the one you had.) The bankruptcy courts are limited in how much they can award for that, but something.

      Litton, because they took the debt over when you were behind, is also a debt collector under the Fair Debt Collection Practices Act. (Except in a few courts where some not-so-friendly judges have said that mortgage servicers can never be debt collectors.) Sending you a bill is also a violation of the Fair Debt Collection Practices Act. It’s a false statement of the amount and legal status of the debt. You can sue them for that. You can find a lawyer who does FDCPA law in your state at NACA.net. What will you get? Well, you were annoyed; that’s about it.

      Now, is Ocwen a debt collector? We really want them to be. The letter that says the loan was “sold” to Ocwen helps. (We like “sold” as oppposed to say, given back.) If they count as the original creditor, then the FDCPA doesn’t cover them. If they count as a debt buyer, buying the debt when it was behind, then they are. (Some states have laws that cover original creditors, too. It would really help if you were in one of those states.) Then Ocwen putting on your credit report that you’re 180 days late violates the FDCPA. (False statement of the legal status of the debt). That false statement caused you to lose this loan. (That can be tough to prove–I doubt your lender would want to testify for you, but maybe.) You could ask a jury to really sock them for something substantial, because you really were hurt, not just annoyed, by what they did.

      (I think that it’s perfectly apparent that putting late charges after bankruptcy on your credit report violates the bankruptcy discharge, too. Because I think the record is clear that the original purpose of credit reports was to pressure people to pay. Using credit reports to help people get loans came along later. Almost no bankruptcy judges anywhere agree with me on that. If you had a judge who thought credit reporting on a discharged debt violated the bankruptcy law, then that judge couyld slam Ocwen for causing you to lose that loan.)

      You might also be able to sue Experian. Usually under Fair Credit Reporting, you cannot sue anybody unless you first do a dispute. But you can sue a credit bureau for a re-insertion. If they delete something out of the credit report–and then put it back–they are supposed to warn you. They never warn–they just try to prevent re-insertions. So the balance on Ocwen was deleted when you filed bankruptcy; and then they let is back in. Is that a reinsertation? Maybe. (Now to make that argument, you have to say that the Ocwen original laon and the Ocwen “sold” loan are the same. To get the FDCPA to work, you have to argue they are different. So .. . . Well, I’m a lawyer. (Sadly, you’d be in danger of losing on the FDCPA with an anti-consumer judge saying Ocwen is an original creditor; and then lose of the FCRA with the anti-consumer judge saying there’s no reinsertion because it’s a different loan. Now if you had a pro-consumer judge, you might win on both. ) You might also go after Experian for allowing it back in under the Terri White class action. If you want a headache, you can read about that here. http://www.nclc.org/images/pdf/unreported/White_Order.pdf

      Good luck. I’ve given you my best shot. Wish I had more.

  • Elaine

    March 23, 2012, am31 12:06 AM
    37

    My husband and I filed for bankruptcy and was discharged March 2011. We did not include our home in the bankruptcy but have not reaffirmed the loan. We have been paying the mortgage and have never been late. Our credit reports show that our mortgage was included in the bk and is reported as being paid on time. I disputed the fact that it was included in the bk and transunion took the entire history of the loan off my credit report. So now I have no history of paying the bill. Should I have left it alone or was I right in having it changed? How do I get my current mortgage payments reported on my credit report? Thank you!

    • Robert Weed

      March 23, 2012, pm31 5:14 PM
      38

      Elaine:

      Sorry, you should have left it alone. They were making a mistake reporting the payments, and when you disputed it, they saw that mistake and fixed it. The opposite of what you wanted.

      Most people, like you, think you choose what debts you “include” in your bankruptcy. Lawyers, judges and credit bureaus see it differently. When you file bankruptcy, EVERYTHING is included. Some debts you can’t get rid off–taxes, usually, child support, student loans. And some you still pay–your mortgage if you want to live there. But they are all “included.”

  • Elaine

    March 26, 2012, am31 12:44 AM
    39

    Is there anyway I can get my mortgage payments back to being reported on my credit reports? Do I have to reaffirm my mortgage to do that? What are the benefits/drawbacks of reaffirming my mortgage?

    Thank you again!

  • DJ

    April 3, 2012, pm30 6:43 PM
    40

    Thank you so much for your response. You have given me plenty.

  • Steven R

    April 15, 2012, pm30 10:14 PM
    41

    Robert,thanks for having all this information to read through, it has helped us out with pushing through our current issue with creditors and credit bureaus post bankruptcy. We filed a chapter 7 Bankruptcy and it was discharged April 2010. I have done well rebuilding our credit and we were ready to purchase a home so when i checked my credit 1 bureau started reporting in February 2012 that our Mortgage that was included in our Bankruptcy, was in Foreclosure and didn’t show included in Bankruptcy. I have disptuted this on the credit report and the creditor denied to clear up my Credit Report. Now I have sent a certified letter to both the creditor and the credit bureau with proof that the Mortgage was included in the bankruptcy to get it taken off my report. If you could help me find out what the next step will be if it is denied again that would be much appreciated. Thanks again for your blog!

    • Robert Weed

      April 16, 2012, am30 5:56 AM
      42

      Look for a credit report lawyer in your state. Go to naca.net. Naca is sponsoring a class for their lawyer members on this topic in the next week or so. (This NACA is the National association of Consumer Advocates–not the NACA that works on loan mods.)

  • Marianne Kerstein

    April 17, 2012, pm30 8:36 PM
    43

    We filed for Chapter 7 back in 2007 and both our first and second mortgages were discharged and not reaffirmed. We are preparing to go thru a divorce and have stopped making payments on the second mortgage as we are not planning on keeping the house and are upside down anyway. The second mortgage company has now started calling regarding payment. I realize that the lien on the home still exists, but is the mortgage company violating the law by calling us about payment on a mortgage that was discharged, and if so, what should we do?

    • Robert Weed

      April 18, 2012, pm30 4:13 PM
      44

      Marianne:

      Yep. The second mortgage company is violating the bankruptcy law by calling you.

      You should go back to your bankruptcy lawyer and ask the bankruptcy judge to sanction them. Make a little money and also do your bit for “the rule of law.” Big companies are like small children–they do what they can get away with. It’s a good thing for the country if you don’t let them get away with calling you illegally.

  • Marianne Kerstein

    April 26, 2012, pm30 1:30 PM
    45

    Does it cost anything to go back to our Bankruptcy lawyer and ask to have them sanctioned?….it isn’t an everyday occurence…but they have now called me twice in the last week and half.

  • Lana

    May 15, 2012, pm31 6:33 PM
    46

    Hi. I filed a chapter 13 bankruptcy and reaffirmed my home, however I am currently behind on making the mortgage payments. The BK should be discharged in about a year. If I am not caught up by the time the mortgage is discharged, will the mortgage company be able to immediately start foreclosure proceedings?

    • Robert Weed

      May 15, 2012, pm31 6:38 PM
      47

      Lana:

      You’re telling me that since you filed the Chapter 13, you have fallen behind on your mortgage payments. Yes, if you are not caught up by the end of your Chapter 13 plan, they can foreclose. In fact, they could ask the bankruptcy judge for permission to start foreclosure now. You need to let your lawyer know that you are behind, BEFORE the bank goes in front of the judge.

      Why are you in chapter 13? And why have you fallen behind on the house. You should also have a discussion with your lawyer about whether staying in Chapter 13 makes sense for you. And whether there’s a strategy for getting out.

  • Barbara

    May 24, 2012, pm31 2:20 PM
    48

    Hello…..Chapter 13 was filed in early 2003. We paid all our trustee payments on time, and discharged in 2009. When checking my credit report this month, I noticed that Equifax was reporting our mortgage with Wells Fargo as being 2 times 30 days late, 1 time 60 days late, and 90 days late 6 times starting in Oct. of 2005, with no other bad marks with Wells Fargo Mortgage after March of 2006. I understand that we were in arrears when we filed in ’03, but have since never been late with our mortgage payments. I filed a dispute with experian, and got the dispute letter in the mail stating that the dispute was “complete” and the findings were the same. I have several questions…..One, these delinquencies do not show up on my husbands credit report even though it is a joint account…what could be the reason since he is on the loan?….Two, can they Wells Fargo Mortgage) legally report us late after the initial filing for bk….Three, can they report this after discharge, which was in 2009… March of 2013 will be 10 years since filing, so will all this fall off anyway. Also, our first filing was dismissed due to our lawyers not filing some papers she was suppose to at the courthouse…she filed the interlocutory papers by phone, and it caused our case to be dismissed. That is the only bankruptcy records that are showing on both our reports, showing just that case, and it being dismissed. We immediately refiled, paid as we were suppose to, and it was discharged….again, it doesn’t show on our credit reports…..sorry to ramble, but please let me know how to handle all of this and what avenues to take. Thank you and PLEASE help!!

    • Robert Weed

      May 24, 2012, pm31 4:01 PM
      49

      Barbara:

      Wow Barbara. I have a blog on that exact topic–but I don’t have any good news, or not much. http://robertweed.com/blog/chapter-13-bankruptcy/chapter-13-bankruptcy-and-your-credit-report/. Judge Sue Kelly, bankruptcy judge in Wisconsin, says no they cannot legally report you as late once the chapter 13 is filed. Judge Brian Kenney, from Virginia–oops he’s my judge–said yes they can.

      That knocked me out of the fight.

      Don’t know where you are–but you can take what I have on that blog and see if there’s a lawyer in your area who’d be willing to make that fight. My stuff would provide a starting place, but like I said, I lost.

      Why does this show on you but not your husband? Who knows. There’s an argument that Experian should not allow late reporting during a chapter 13, even if the creditor wants to do it. So maybe Experian blocked the late reports on your husband but forgot to do it for you.

      You should go to naca.net and look for a credit report lawyer in your state; and see if you can interest someone in this problem.

  • Christine

    May 29, 2012, pm31 9:19 PM
    50

    I am really confused now. I filed for BK with a lawyer in Feb 2010, discharged in June 2010 (included our house). BofA did not sell on foreclosure till May 2011. I keep hearing from mortgage brokers that the timer for getting a mortgage will start from May 2011 (2-3 years from date). However, it sounds like from the folks here that since we did discharge the house with the BK Ch 7, that the timer should start with the BK. This could potentially mean that we could buy in June 2012 vs. May 2013. I’ve seen so many opposing opinions on this, I don’t know what the story is any more. It sounds like if your credit report says, “Discharged in BK” for your mortgage loans that the lender cannot look up titles and just look for the foreclosure date and use that instead?

    Also, my other question is that I was looking at my credit scores (I have a subscription service), and pulled up my credit report. It looks like that although it went up, that it still shows “Derogatory” for accounts that were discharged. It is also showing some of these accounts as “delinquent/late 180 days,” “unknown,” or “Collection/chargeoff.” It sounds like the “condition” is ok to show “derogatory,” but the “pay status” should not be showing “delinquent/180 days,” “unknown,” nor “collection/chargeoff.” Instead the pay status should be showing “Discharged in Bankruptcy.” Is that correct?

    My subscription service Zendough has the option to dispute any items directly to the credit agencies, so I was going to file that way first. If that didn’t work, then I would engage your help.

    • Robert Weed

      May 30, 2012, am31 7:01 AM
      51

      Confused Christine:

      As far as I know, the mortgage brokers are right. There are two waiting periods and BOTH apply to you. Two years from the bankruptcy discharge. But ALSO three years from the foreclosure. The foreclosure should NOT show on your credit report. But there still IS a foreclosure. That three year period is not about your credit. It’s a three year lockout as punishment for giving up the house.

      As to your credit reporting, the pay status should all show bankruptcy and nothing since then. If Zendough is handling your disputes, make sure you and they keep good records. My recommendation is you do your disputes yourself, but that’s up to you.

  • Christine

    May 30, 2012, am31 9:50 AM
    52

    ok – understood. I know VA loans are 2 years from foreclosure so that’s where I got the 2 years from. However, I know the banks can use whatever they want.

    Anyway, I guess all I can do is work on correcting the “Pay Status” remarks on my credit report and keep increasing the score in the mean time.

    Thanks for your advice and your informative blog!

  • Marianne Kerstein

    June 4, 2012, pm30 4:38 PM
    53

    We recently stopped paying on our second mortgage which was discharged in Chapter 7. We are getting divorced and neither of us can afford to keep the home. I noticed on my statement from the second mortgage company this month that there are $84 in delinquency expenses added to my account. Are they allowed to add these expenses to an account that has been discharged in bankruptcy? I had to inquire because they have already violated the law by trying to call me…so I figured if they were violating one law, they wouldn’t think about violating two.

  • Marianne Kerstein

    June 4, 2012, pm30 5:15 PM
    54

    We have a second mortgage that was discharged in Chapter 7 and not reaffirmed that we have stopped paying on due to going thru a divorce. The mortgage company has started violating the law by trying to call me regarding payment and today I noticed that they are adding delinquency related expenses to my account. Are they allowed to add these expenses to a mortgage debt that was discharged? If not, how should I handle it?

  • Carl

    July 18, 2013, pm31 4:50 PM
    55

    Mr. Weed,

    I filed Chapter 7 in April of 2004 and it was discharged in July 2004. I did not reaffirm my mortgage but have been making the payments for the past 9 years, never late. In fact, the mortgage has never been late from day one of the loan,but my attorney told me it was best to include it so if there were problems with my finances down the road, I would be protected. My mortgage fell off my credit report in 2011, 7 years after the filing date but my mortgage was sold to a new company in 2/2013. The new company immediately placed their account on my credit report saying it was included in a bankruptcy and reported a delinquency date of 2/2013. I disputed it and Transunion and Equifax deleted the account. Experian however, updated the account with correct dates in 2004. Experian refuses to delete the account per the FCRA that states accounts may only report derogatory information for 7 years and says it will stay on the report. It has dropped my credit score because the account is reporting as “included in bankruptcy”. The bankruptcy itself will fall off in April of 2014. Again this month, this new mortgage company reported the account again to Equifax with a bankruptcy date of 2/13, again tanking my scores. I have disputed it again. It is still sitting on my Experian report. How in the world do I get this fixed? I talked with a lawyer that deals with credit reports and he asked me had I been harmed? had I been denied credit? he stated, no harm, no foul but I am scared to even apply for credit because I have a nice credit line with my bank and am worried they will pull the report and see this account listed or see that my scores tanked. I see harm in them reporting something that is not accurate and re-aging an account that was discharged 9 years ago. I see harm in an account that was already deleted two years ago, showing back up. Is there a way to get this fixed ?

    • Robert Weed

      July 18, 2013, pm31 6:39 PM
      56

      Carl:

      Wow–what a mess. First of all, I’m sorry that the credit report lawyer you talked to was not interested. There are not that many credit report lawyers and some of them only want to get into cases where there’s been years of problems. You can look here at NACA http://naca.net/find-attorney and see if you can locate another lawyer who might be more interested in helping.

      That’s an example, I have to say, of why I think bankruptcy lawyers should handle these problems, although only a few of us do. Bankruptcy is supposed to get people a new start. If somebody is banging on your credit, it’s as bad, worse actually, as if they were still sending you bills or even calling. You haven’t gotten what the law promised. That’s why I stick with my bankruptcy clients and fight these credit report problems whenever they pop up–at the time or years later.

      There was/should have been a bankruptcy on that account no later than July 2004–and it should have come off your credit seven years after that in July 2011. The bankruptcy itself stays for ten years but debts in the bankruptcy stay for seven. Experian should have fixed that automatically–and definitely after you complained.

      The creditor reporting bankruptcy in 2/2013 is clearly wrong–and you should dispute that date with Experian, too–Experian is then required to pass the dispute back to the creditor. Disputing directly with the creditor doesn’t do anything for you, legally.

      But after you dispute a couple times, you need a lawyer who will take your case.

      (Now, it’s not quite clear whether the lawyer you talked to turned you down flat, or wanted you to go to apply for credit and then contact him again. Some judges looking at FCRA cases want to see evidence that you applied for credit without being TOLD BY A LAWYER. So maybe you should take the hint and then see that lawyer again, or another one.)

      • Carl

        August 8, 2013, am31 1:05 AM
        57

        I wanted to thank you for your reply :) I sure wish you practiced law in my state! this just keeps repeating over and over again. Experian finally deleted the account 2 weeks ago ( don’t know if it will stay off ) and it has never been reinserted on Tran Union since the first dispute but, I am now into my 4th dispute with EQ. The mortgage company reports it every month, I dispute it, Equifax deletes it a week or so later. It was reported again yesterday with the date of delinquency as 07/13 and of course I disputed it again. It’s a never ending cycle right now. Thank you again for your time!

  • Stacy Heron

    October 30, 2013, am31 1:54 AM
    58

    Hello, Mr. Weed,
    I really appreciate this forum. My husband filed Chapter 7 Bankruptcy in August 2009 and reaffirmed the mortgage. That loan dropped from his credit report. I then filed Chapter 13 and continued to make the payments to thr trustee. I filed a 13 because I had already filed Chapter 7 some years ago and could not do another one until the next year. I paid the trustee payment on time and then I converted my Chapter 13 to a Chapter 7 and it discharged in April of 2011. I did not reaffirm the debt. My lawyer told me we were cleared of the debt and we could either move out or stay there for free until the bank came to take the house. What he did not explain was that the bank would still foreclose on the property to clear their books. I didn’t find out until we had already moved into a rental and began getting foreclosure notices in June2011. Instead of letting it go into foreclosure, I quickly short sold the home through a HUD program and that closed in October 2012.
    Long story short, Chase reported me late while I was in Chapter 13 (4 times) and then they reported us both late the three months prior to the short sale. It shows included in bankruptcy on October 15, 2012…..that was the short sale date, not the bankruotcy date. Shouldn’t it show Included in Bankruptcy on April 24, 2011?? And shouldn’t it NOT show any late payments during and after bankruptcy?

    • Robert Weed

      October 30, 2013, am31 10:34 AM
      59

      Stacy:

      What they are supposed to do in Chapter 13–or rather what they are allowed to do–is unclear. I report on my lack of success in getting them to follow the rules here. http://robertweed.com/2011/06/13/chapter-13-bankruptcy-and-your-credit-report/.

      But for sure you should get no late reporting after April 2011. Hitting your credit prior to the after-bankruptcy shortsale is definitely a violation. You should dispute those–and if the dipsute doesn’t work, hope you can find a lawyer in your area to sue them. Good luck!

  • Loretta Jones

    November 10, 2013, pm30 2:53 PM
    60

    I filed a chapter 13, stop reporting my mortgage payment even though they were on time, am the arrears were caught up. My second mortgage was paid late because we thought the balance was going to be paid by the court, however it was not, so I paid is off, now they are reporting paid charge off. How are they supposed to be reporting it. And what about ocwen why are they not reporting on time payment.

  • Mario

    July 3, 2014, am31 3:09 AM
    62

    My name is Mario, I had a bankruptcy Chapter 13 in 2009 and I did not include my house mortgage and in 2012 I got dismissed, my question is: Why my mortgage company does not report my payments to the credit bureau, I have never been late in my mortgage. I call them and they told me that by LAW they are required to report it. May you please tell me if there is any place where I can complain about that, because I want to increase my credit score, I do have all the statements from the Mortgage company.

    • Robert Weed

      Robert Weed

      July 3, 2014, pm31 2:00 PM
      63

      Mario:

      You need to talk to a Fair Credit Reporting lawyers in your area. One good place to look is. http://www.naca.net/

  • julie

    July 29, 2014, pm31 11:55 PM
    64

    i’m coming to the close of my chapter 13 payments (October) and have incurred a relatively modest amount of new credit card debt during the last five years while I was making my ch 13 payments. will the trustee pull my credit report at the end of my payments and refuse to discharge my case because of the new debt? Or should I do whatever it takes to pay the credit cards off in the next three months (like a 401k loan)?

    • Robert Weed

      Robert Weed

      July 30, 2014, am31 10:13 AM
      65

      Julie:

      I have NO IDEA WHAT the papers you signed in your bankruptcy allow you to do, or not do. Here, nobody would check, or care much. Why don’t you ask your own lawyer what the rule is where you are?

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