Credit Report Errors After Bankruptcy
February 13, 2007
People file for bankruptcy to get protection from harassing creditors and collection agencies. Most consumers don’t want to take the walk down the road to the bankruptcy court, but they do so because they are at wit’s end and don’t know what else to do.
Not only are creditors required to stop contacting you after you file for bankruptcy, they are also required to update your credit reports to show that you have a $0 balance and that the obligation was discharged in bankruptcy.
The bankruptcy laws don’t force creditors to take this action, however. Rather, it’s the Fair Credit Reporting Act that requires a creditor to update reporting whenever that creditor knows or has reason to know that the current reporting is incorrect or incomplete. In other words, once a creditor is informed of a bankruptcy that creditor is required to update its reporting of the debt.
Simple, right?
The problem is that many creditors do not update your credit report after your bankruptcy has been discharged. Some people believe that this is just a mistake the creditors make, that some accounts fall through the cracks. But the truth is that these creditors know exactly what they’re doing. They continue to show the balance as due in the hopes that you will be forced to pay the debt in the future.
How often does this happen, you ask? Nearly every single credit report I see for someone who has gone through bankruptcy has a significant error on it, and most have 3 or more errors.
If you have errors on your credit report then you have rights under the US Bankruptcy Code and possibly under the Fair Credit Reporting Act. The creditors can be held liable for money damages and can be forced to pay your legal fees.
Don’t take this sitting down - fight back!
Technorati Tags: bankruptcy, discharge, credit report, FCRA
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