After Bankruptcy Credit Reports–Why You and Your Lawyer Need to Follow Up
Posted by Robert Weed / in After Bankruptcy, Blog, Weekly Posts / 2 comments
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.
I filed chapter 7 in 2001 in New York State, and did not reaffirm my mortgage with Chase. My ex was still on this joint mortgage with a quit claim. In Jan, 2013, Chase told me that if I fell behind on my payments it would not be reported because of the bk. I was behind up to 60 days from Feb onward until I caught up the end of August. My ex noticed the late payments on her credit report and went ballistic in mid-August. I checked and they were reporting late for me also.
I called Chase, and they promised to remove the late payments for both parties back to the 2001 bk (effectively disappears because CRs don’t go back that far). They got it right for me, but they did not get it right for my ex… which was my priority.
In September, 2013, I filed chapter 7 for a second time. This second bankruptcy did get applied to my ex’s reports and no payments are updating now: Experian disappeared entirely, Equifax has suppressed the late payments, and TransUnion is showing the delinquent payments (and also contains an error with a Partial Payment Agreement that is not true).
Question/Advice: If Chase is going to apply the second bankruptcy to the co-signers credit reports, I really should be able to make them apply the first bankruptcy to the co-signer instead? Yes?
Your bankruptcy does not cover your co-signer ex. Her credit report should just show the history of the payments, on time, late whatever, as though your bankruptcies never happened.