Your Credit Report after Bankruptcy: Do You Want to Get It Right?
I’m one of a handful of lawyers in the country who promises to fight the credit bureaus–sue them if necessary–after your bankruptcy is over.
I want to make sure that all the debts discharged in your bankruptcy are reported by the credit bureaus as “discharged in bankruptcy.” That should be automatic, but it’s not. Let me tell you how I found out.
This young couple drove up from North Carolina, sat in front of me, and pounded on my desk. It was 1999, but I still remember. “We filed bankruptcy with you in 1996; our credit report still isn’t right. You didn’t finish your job.”
Up ’til that time, I had never looked at an after-bankruptcy credit report. Never talked about it with any other lawyers; never had it come up at any of our meetings or conventions.
But when I thought about it, these folks were right! When a bank, or car dealer or mortgage company wants to know if bankruptcy cleaned up your credit, where do they go? Do they look at the records of the bankruptcy court? No.
They look at your credit report.
If the credit report isn’t right, I had to agree the lawyer (me) hadn’t finished the job.
By 2001, I had seen hundreds of after-bankruptcy credit reports. And I was shocked. Three of the major credit card companies constantly ignored the bankruptcy. They left late status, charge offs, past due balances just parked on people’s credit reports.
A big reason it took people seven years to get back to good credit, is most people NEVER got their credit reports right. The problem wasn’t the bankruptcy. It was those bad debts, charge offs and past dues that were left parked there.
The more I found out, the madder I got. I started suing the creditors and the credit bureaus. I urged other lawyers to sue them, too. I spoke on this twice at the National Convention of the National Association of Consumer Bankruptcy Attorneys (NACBA). And once at the credit report conference of the National Association of Consumer Advocates (NACA).
Today, things are better. Within two months after the bankruptcy is over, a little more than half the credit reports I see now are right.
But that still means, a little less than half the credit reports are not right. When your case is over, there’s about a one in three chance that at least one of your debts will be parked on your credit report as a bad debt. It will look like you still owe the money.
A handful of lawyers have been suing on this for the past seven or eight years. A couple of the top credit report lawyers in the country also got involved. My good friend Charles Juntikka, from New York City, brought in David Boies, who is famous for doing billion dollar law cases.
With all that, still three or four people out of ten people coming out of bankruptcy will have at least one creditor who says you still owe the money.
I still work with all our clients, to fix their credit reports when your case is over. If there’s a bad debt showing there, we draft up a letter for you to sign, asking the credit bureaus nicely to fix it. If that doesn’t work, we write up a second letter.
If two letters don’t work, we sue. On average, we sue credit bureaus two or three times a month, to get people’s credit reports right.
Recently, we took a look at the records of all the courts here in Northern Virginia. I wanted to see who else around here sued the credit bureaus. As far as I can tell, we are the only bankruptcy lawyers in Northern Virginia that do.
If you select me to be your lawyer, and get our help to get your credit report right, you can thank those people who drove up from North Carolina and told me I didn’t finish my job.