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 a lot better. Two months after bankruptcy, a little more than half of the people now have their credit reports right. That still means a little less than half the people, do not have their credit reports right.
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.
{ 19 comments… read them below or add one }
Mr Weed,
I really, really wished you are here in CA. There’s not a lot of lawyers out there that cares about their clients, you seemed very passionate and caring… I’ve been reading your blogs, different topics and you makes so much sense, you take time and you explain things very well.
I have sent you my question earlier but I am not getting a confirmation that it went through and I’m in desperate to get your opinion on my case, so I’m sorry if I am re sending this again. I am very scared that I get sued and creditors garnish me, I need guidance… please help.
________
My house in NV was foreclosed 2009, lost job and filed chapter 7 bankruptcy on May 2009 but was dismissed, I had to move to CA and because of severe stress I couldn’t follow through the bankruptcy in NV.
I now leave in CA and have a job, I kind of put my debt problems in the back burner because there’s a lot of things going on with me. My bankruptcy lawyer in NV told me to wait 6-7mos before filing again here in CA but I never did.
I just happened to check my credit record and some of my creditors put “charged off”, “discharged from BK chapter 7″ and some “petitioned for bankruptcy” on status.
I never paid my second loan/mortgage ($75,000) and it says to my credit report status “Petition for Chapter 7 Bankruptcy”. What is that mean and can they forced me to pay? can they sue me? should I file bankruptcy here in CA? My credit loan (all cards plus the 2nd loan) total is around $85,000 (my job now pays $90,000/year with monthly expenses of $4,500).
Please response…I am scared, I’m a single mom and don’t know any trusted lawyer here.
Thank you.
DIVINA:
Your credit report is obviously all confused. But the fact is, you owe those debts, since your bankruptcy was dismissed, regardless of how they are hitting your credit. And at some point someone will figure that out and they will start coming after you. And yes they can sue you, garnish you, and force you to pay. Your bankruptcy lawyer in NV was right that you needed to talk to a lawyer there in California. You didn’t say how many children you have, but you have good income and in a lot of places you would find it tough to get a bankruptcy approved. Here in Northern Virginia it can be tough to get approval for say a single mom with one child at home making $90,000. Not saying it can’t be done. But starting now, when no one is chasing you, would allow time to do the planning that might be needed to line up everything and get it approved. Now with six kids, approval would be easy. (It also matters if you are in a high rent part of California–which is most of California, I think. Or if you are in some small town where rents are low.)
Hi Mr Weed,
Mike in Loudoun County here, I really enjoy reading your blog. Quick question: I noticed that 2 years after a Chapter 7 discharge, a mortgage bank (whose loan was discharged and not reaffirmed) was still reporting post-discharge payments to a credit bureau who was listing them on a credit report. The loan shows as discharged in chapter 7 on the report, but the voluntary monthly payment dates and amounts (which keep the owner’s in the house as per the unwritten/unspoken ride through agreement) are still being reported. Is this legal? If not, maybe you can do something about it on behalf of the mortgagees. I look forward to your reply. Keep up the great blog!
MIKE:
As long as the payments are showing current, it’s helping you. So I think the credit reporting is wrong, but if it helps, why mess with it. But if you are thinking of changing your mind and moving out, then you need to get the credit reporting stopped. Not sure where you are going with this.
Thank you Mr. Weed for your response.
How does the statue of limitation apply in my situation? Most of these credit cards/debts are coming to 3 – 4 years since last activity. My second loan ($75,000) last activity (my last payment) was early/mid 2008 and credit cards were late 2008.
When does SOL start? I was told – last activity, meaning my last payment. Is that right?
Mr. Weed,
Glad I came across your website! I have a question. I was discharged from a Chapter 7 about 8 months ago. All of my credit card accounts except one are reporting to the credit bureau zero balances and N/A. This one particular bank is still reporting my credit card limit and my high balance which exceededs my limit. Is this legal? When I apply for credit, the computer doesn’t read “Discharged in Chapter 7 Bankruptcy” it reads numbers. This company is refusing to remove these balances. What recourses do I have if any?
LOUIS:
You need to do a Fair Credit Reporting dispute. Write a letter to the Credit Bureaus with a copy to the creditor. Say that they are reporting a balance, but it should show bankruptcy and balance $0 of N/A. If that doesn’t work, send a second letter.
If two letters don’t work, you should sue them under the Fair Credit Reporting Act. Look for a lawyer in your area who does that work at NACA.net. (National Association of Consumer Advocates.)
A handful of bankruptcy lawyers in the country do this. You probably should also ask for bankruptcy lawyer if they do.
Filed Chpt 7/29/09. American General Fin. show Duscharged in Bankruptcy but in the monthly payment history show “CO” (charge off) for July/09 and August, 09 . I thought the FTC stated no can do AFTER filing for bankruptcy. Experian is the only credit reporting compnay showing the CO.
Thanks
Don Kurtz
Don: That’s pretty borderline if it then shows BK for September, 2009. If it doesn’t, then you should fight.
I’m sorry -Experian shows Status: Discharged thru Bankruptcy Chpt 7
Accouny History: Debt included in Chpt 7 bankruptcy on Nov 13, 2009. That was the date of the discharge. We filed on 7/29/2009.
For the payment history at the bottom shows: 2009
Aug Jul Jun May Apr Mar Feb Jan
CO CO 60 ND ND ND OK OK
Just a note on Experian: They show date of status as Nov, 2009, the date of discharge on all accounts “included on Bankruptcy” and I was told today by Experian today they incluede all adverse action from the date of filing Bk to the date of discharge.
Thanks again. It just does not seem legal or right to ding us twice. How can it be charged off twice for the same bankruptcy?
Don Kurtz
OK, I give up. Received a LETTER from Experian telling me they report you as “late” from the month of filing of Chpt 7 Bankruptcy if you stopped making payments on the account (as advised my my attorney) and continue to report the account 30-60-90 days late until the the month AFTER discharge. American General Finance is reporting 90 days late AFTER filing for bankruptcy AND two (2) CO (charge off) for July and August of 2009. June is reported as 90 days late. How can they charge off the account and report it TWICE after filing for bankruptcy? No wonder consumers are mad a hell!
Thanks again for all the help
Don Kurtz
I have the same problem with Experian as Don Kurtz. It’s like getting hit 2-3 times on your score. I have disputed my husbands 3 times, plus called Experian and disputed them and they are still wrong. Another thing that happened on my report was when I disputed 3 that had charged off and included in bankruptcy, they removed the accounts only to be back on my report 6 months later. Then I would dispute them again, they would come off my report then again come back on. How do you fix this problem? It’s been 2 years trying to get it all straightened out, but it doesn’t seem to be working. Isn’t there a temporary stay put in place when you file on reporting , then a permanent stay put in place after the discharge? My understanding of this is that once the temp. stay is in force, no negative reporting is allowed. My other understanding is, if it was not on your report before you filed, it shouldn’t be there after you filed. Am I wrong with my assumptions?
Liz: If they take something off and then it comes back, that’s called a “re-insertion.” Under the Fair Credit Reporting Act, they are required to give you notice of a re-insertion, which they never do. That gives you the right to sue them, and by suing them you can get it fixed and your lawyer will get paid and maybe a little for you. Go to NACA.net and look for a lawyer near you who does FCRA.
I have a couple questions… #1. I discharged in nov last year from chapter 13 and checked my credit report recently which shows that I still owe one of my creditors, which were included in the bankruptcy, and it wont be removed til 2014. should I just go through my bnkrptcy att to get this fixed?….#2. My car loan which was through chrysler financial and now is another one won’t tell me anything even though I have kept paying on it and the chapt 13 is discharged. They won’t tell me the pay off amount or start sending me my monthly bill again and tell me if I want to continue making”voluntary” payments I can but not required to do so. Plus, this loan doesn’t show on mine or my husbands credit report. So I’m unclear on what to do about that situation at all. If you have any suggestions that woulda be so helpful.
Nicole:
I have really struggled to answer your questions.
1. You need to get the debts that were paid off in your C13 showing as discharged on your credit report. Only a handful of bankruptcy lawyers in the country promise to work with you until your credit report matches your bankruptcy. But your bankruptcy lawyer is where you should start. Maybe he’s one who offers that service. Maybe no one has every asked him before.
If your lawyer will not help you, then you should write your own letter to the credit bureaus where the creditor is still showing you owe the money. Get your credit reports individually from each of the three credit bureaus. Annualcreditreport.com is a good place to go. Do NOT go to freecreditreport.com.
If your letters don’t fix it, find a lawyer who does Fair Credit Report law in your state. The National Association of Consumer Advocates, at naca.net, is a good place to look for a credit report lawyer. Or, your bankruptcy lawyer might know someone in your area.
2. Depending on how your Chapter 13 plan treated it, it is not totally clear that the car loan was discharged or not. That’s kind of a gray area and your bankruptcy Chapter 13 plan could do it either way. So Chrysler is treating it as discharged, but I’m not positive that’s right–which means I’m not positive they might not change their mind. If it in fact is discharged, then it should NOT show on your credit report and you are making voluntary payments. If you don’t make those voluntary payments, they can come get the car, but they cannot come after you. But, like I said, it may not actually be discharged and there’s some risk if you don’t pay and they get the car that they figure out you do sitll owe the money and come after you. Sorry, even if I have all your papers in front of me, I’m not sure I could give you a better answer. At this distance, I know I can’t. Sorry.
Atty Weed,
I was discharged from a bankruptcy almost 11 years ago. It has been removed from my credit report. However, 2 of the creditors have remained on my report, one (Macy’s) states the last payment date as 6/11/99 and last reported change as 11/1/2001; states the account is in good standing. I haven’t had any dealings with Macy’s since before filing.
Another account, also placed in the filing is showing last reported activity as recently as 7/1/09. There hasn’t been any activity again since the filing and discharge of almost 11 years.
What can I do about these?
Angela:
The big idea in credit reporting is that you have ti dispute stuff that you don’t agree with.
The Macy’s account should have come after after seven years of no activity–BUT, it’s helping you, very slightly. I’d leave it alone.
The “other account” that still reported you through July 2009 needs to be fixed. Write to the credit bureau, say it was discharged in your 2001 bankruptcy–send them the list of creditors in your 2001 bankruptcy if you can still find it–that should take care of it. If it does, find a credit report lawyer in your state at NACA.net.
Mr. Weed,
My wife and I filed for Bankruptcy protection in April of 2005. Our bankruptcy was discharged in Aug. 2005. We have a home equity line of credit with Huntington National Bank that was included and discharged in this bankruptcy filing. We have been making voluntary payments on this loan for the last 7 years and it seems in September 2011 we missed a payment and we are now trying to Refinance our fist mortgage and this Home Equity line of credit into one lower monthly payment so we can get rid of this loan completely. The mortgage company doing our new loan informed me that Huntington is now reporting that we filed bankruptcy on this loan in 2011 making it look like we filed bankruptcy twice. They also erroneously reported an auto loan that was paid in full in 2010 as a bankrupt loan also. This will be the second time that Huntington will have caused us not to be able to refinance which could have saved us over $500 a month over the next 15 years. I thought once the loan was discharged thru bankruptcy protection they could no longer report on the payment status any longer. Please give me any advice as to what I should do or if there is legal action I can take to stop Huntington from harassing me by reporting bad information to the credit bureaus. I have a copy of a credit report. If you would like to see it please let me know.
Thanks,
Mike M
Mike:
So, what’s on your credit report. Your lender is supposed to tell you what credit bureau they used–and that entitles you to a freed credit report form them so you can see for yourself. Otherwise, you can go to annualcreditreport.com and credit credit reports from each of the three. Do NOT use FREECREDITREPORT.com.
Assuming Huntington is reporting a 2011 date for your bankruptcy, that’s not “complete and accurate,” which is what they are required to be. Your rights under the Fair Credit Reporting law, mostly begin after you have done a dispute; so you need to do disputes. If that doesn’t work, then you have the right to take legal action. You need to find a lawyer in your area who does FCRA law. naca.net is one place to look.
the mortgage company doing the loan should have explained all this to you and that would have gotten you on it, sooner, but you can at least get started today.
Good luck.