Your After Bankruptcy Credit Report
Your after bankruptcy credit report is a big part of your “fresh start” in bankruptcy.
That’s why it’s my job, as your bankruptcy lawyer, to make sure your after bankruptcy credit report is right. Only a handful of bankruptcy lawyers see it that way, and I’m one of them.
Mistakes on your after bankruptcy credit report can come back to haunt you years later.
Let me tell what happened to Melanie Short.
Melanie Short (not her real name) filed Chapter 7 bankruptcy with me in 2008. She had owned a house in Florida. The value dropped more than 30%. She could not sell. We needed to clean that up.
Melanie also had some credit cards and other bad debt. They got out of control when she moved back to Virginia and couldn’t sell the Florida house.
The bankruptcy went fine. Filed bankruptcy July 2008; approved October 2008.
We checked her credit report early in 2009. Lucky we did.
Equifax was showing she still owed Household Finance $3699. After a dispute letter didn’t work, we sued. That got Equifax to fix it. We also got a few hundred dollars for Melanie for her trouble.
In 2011, Melanie started getting collection calls from Bank of America. We were getting ready to sue them–but the calls stopped and Melanie dropped it. (I should have stayed after her. I’m not the hero of this story.)
Fast forward to June 2013–Melanie has loan approval to buy a house again. But, Bank of America is showing a $159,000 foreclosure on her Experian Report. That has to come off or she can’t close the loan.
Melanie needed to get this fixed in two weeks! With help from her loan officer and a little help from me.
Her first problem was Bank of America was not listed in her bankruptcy. Why? She never had a mortgage with Bank of America.
Her Florida mortgage was with an outfit called Home Loan Service, a branch of Merrill Lynch. Merrill Lynch was taken over by Bank of America in January 2009, at the peak of the crisis. At some point in 2011 Bank of America transferred the mortgage loan to itself. That’s what led to those phone calls, which I should have jumped on with both feet.
Because at the time they started calling, Bank of America also hit Melanie’s Experian report with that $159,000 foreclosure.
There’s a happy ending to this story.
Melanie was able to get all this fixed, with cooperation from Experian. (Bank of America promised they would send a letter, but then didn’t.)
What’s the lesson for you? Check your after bankruptcy credit report to make sure everything is showing “discharged in bankruptcy” and balance $0. Then every year or so, keep checking.
Get with your bankruptcy lawyer, or a credit report lawyer, if there’s a problem.