BANKRUPTCY CREDIT REPORT PROBLEMS
Consumers who have had to file for bankruptcy protection and have received a discharge of their debt under the Bankruptcy Code understandably and expectedly will have problems with their credit. In fact, there are likely many delinquent accounts on their credit report, with many past due, delinquent balances. So how can someone, fresh after receiving his or her discharge, have any complaints with errors that may appear on their credit report — shouldn’t their credit report be bad anyway? Perhaps so, but that does not mean that they are not entitled to an accurate credit report under the Fair Credit Reporting Act (FCRA).
A Fresh Start: Robbed?
A chapter 7 bankruptcy is known as a “fresh start” bankruptcy because individuals are liquidating their assets and discharging all of their debts in a relatively short period of time; there is not a repayment plan. A chapter 13 bankruptcy is known as a “wage earner” bankruptcy or a “reorganization.” It involves payments to a trustee over a three to five year period, paying a portion of the debtor’s debts back, and discharging the balance at the completion of the plan. So how are debt supposed to be reported during a bankruptcy and after the debts are discharged?
Debts that are discharged, whether discharged in a chapter 7 bankruptcy or a chapter 13 bankruptcy, should be reported with a $0.00 balance after the discharge is entered. Furthermore, as the automatic stay of creditors prohibited the lawful collection of the debts as soon as the bankruptcy case was filed, generally a creditor or debt collector may not continue to report the account or trade-line as “past due” once the bankruptcy has been filed. If your creditors or debt collectors, however, continue to report the debts listed in your bankruptcy schedule as past due or with a balance due after your receive your bankruptcy discharge, they are robbing you of your fresh start….and a a result your have been damaged: you have been robbed of your fresh start. In such case, Kotler Law and its fair credit attorneys will be happy to help you with your case.
Accessing Your Credit Report
Another frequent unlawful occurrence that the credit reporting lawyers at Kotler Law will encounter helping consumer with credit report problems is a former creditor or debt collector accessing (i.e., pulling) your credit report based upon the previous debtor-creditor relationship that they had with you.
When a debtor-creditor relationship exists, a creditor or debt collector has a legitimate and lawful purpose for pulling a consumer’s credit report — to assess the collectability of the account. Once the debt has been discharged, however, such relationship has been permanently severed. From this point forward — the entry of your discharge order — any creditor or debt collectors you ad a relationship with prior to the discharge no longer have a relationship with you and, therefore, no longer have a legitimate, lawful purpose to pull or access your credit report. Still, many times creditor and/or debt collectors will pull your credit report based on the old relationship. This is unlawful and a violation of the Fair Credit Reporting Act (i.e., an impermissible pull). If you pull and review your creditor report after you receive a discharge and see that a creditor or debt collector that was listed in your bankruptcy schedules has pulled your credit report (look under “Inquiries” section of credit report) you have a case for invasion of privacy and a violation of the Fair Credit Reporting Act. You are entitled to damages and the creditor or debt collector paying your attorneys’ fees and/or costs. Call the experienced fair credit reporting act attorney at Kotler Law to schedule a free consultation today!