On August 31, 2009, notices should go out to four million or so people who had late's and charge-off's showing on their credit reports after their bankruptcies were discharged.

Those notices tell you that you can apply for your share of $45 million the credit bureaus have offered to pay to say they are sorry.

Since, 2002 I've worked as hard as any lawyer in the country to try to correct my customers' after bankruptcy credit reports.  So I'm glad this judge in California decided to do something about it on behalf of everybody. 

That's the good news.

The bad news is, so far the credit bureas haven't offered very much. This settlement gives $750 to people who can "certify" that they were turned down for a job as a result of a post bankruptcy misreporting in their credit report, $500 for mortgage or apartment denial. And $10 million is divided up among the (4 million is my guess) people who don't know how they were hurt. That's $2.50 per person if everyone puts in for it, and it's called a convenience payment. Your share might be $15 if five out of six people just throw the notice away.

This settlement is recommended to the judge by his mediator, and by the credit bureaus, and by a group to credit report lawyers led by Len Bennet, a credit report lawyer from Newport News, VA. (Len helped my law firm learn about credit report law, and we helped him learn about after bankruptcy credit reports, when we did a few dozen cases together in 2002 and 2003.)

This settlement is opposed by Charles Juntika a bankruptcy lawyer from New York, who also first heard about this problem from me. To fight it, he has brought in David Boies, a big time New York lawyer who recently got four BILLION dollars for America Express from Visa and Mastercard.   (Boies was also Al Gore's lead lawyer in the 2000 Florida recount.)

The Juntika/Boies group think that the $45 million that the credit bureaus are offering should be more like $4.5 billion

What should you do? If you think you have been turned down for a mortgage or apartment, or lost a job, email me and let me know what happened. If it is fairly recent, and we have good documents, we should talk about whether you want us to go to court here for you.  (We have sued on two of those recently, and we got people a WHOLE LOT more than $750.) On the other hand, if there's really no proof left, you should seriously think about applying for and getting the money.

If all you are eligible for is splitting $10 million among 4 million people (the $2.50 or maybe more if people just don't bother) I think you should tell them no thanks, you are holding out for more.

I need you to email me. If enough people say no to the settlement, I'll write up papers for the court in California--and maybe fly out there on November 9--and tell the judge most people I know think this deal comes up short. 

It's an uphill fight. But if the settlement is turned down, there's some chance that instead of getting $2.50 now, you might get $75 after another two or three years of fighting in court. I think it's worth waiting and worth fighting. $2.50 still gets a grande size coffee at Starbucks. $75 is three tanks of gas.

Janet Robertson is my credit report paralegal. Please email her, janet@robertweed.com, and let us know what you decide.

Thanks.

Your friend,
Robert Weed
August 2, 2009