1430 Broadway, Suite 1802, New York, NY 10018 • 8605 Santa Monica Blvd #47620, Los Angeles, CA 90069

Of Inaccuracies And Confusion In The World Of Post-Bankruptcy Credit Reporting

After bankruptcy, your creditors have certain obligations with respect to your credit report. If it’s not accurate, your fresh start is jeopardized.

One of the things you look forward to after bankruptcy is the proverbial fresh start. It’s your chance to tell the world that you’re debt-free and ready to begin again.

As I tell my clients, however, the discharge is only as good as the voice it carries. If your existing and potential creditors don’t know you’re out of debt, it doesn’t do you much good.

Your credit report is, to a large extent, the only way a potential creditor knows about your financial situation. If it’s filled with errors, your financial situation isn’t being represented properly.

It’s one of the reasons why I work so hard with my clients to clear their credit report after bankruptcy. But one thing you need to know is that nobody can correct the truth.

Shirley Grantham Wanted A Fresh Start

On September 17, 2010, Shirley Grantham filed for Chapter 7 bankruptcy and including two Bank of America credit card debts. She got her discharge a few months later, and figured she was on her way.

After her discharge, she noticed that her Experian credit report showed one of her accounts as being delinquent while the bankruptcy case was going on. She sent a dispute letter to Experian demanding that they correct the error.

Experian (Sort Of) Corrected The Credit Report

In response to her dispute, Experian corrected Ms. Grantham’s credit report to show that the offending account was “Discharged through Bankruptcy Chapter 7,” and “Debt included in Chapter 7 Bankruptcy.” This is the proper way for a debt to be listed on a credit report after bankruptcy.

The problem was that the Experian credit report continued to show that Bank of America reported the account as 30 days late in November 2010 and reported the account as “charged-off” as of December 2010. This, while also showing a balance due of $0 for those months.

Ms. Grantham, faced with no resolution on her own, went to court and sued Experian.

Inconsistencies And Inaccuracies

Experian claimed that the $0 due notation was a good thing, so Ms. Grantham should be happy – in spite of the fact that the account was shown as being delinquent for those months. Experian tried to toss the case out of court, forgetting that the whole point of the Fair Credit Reporting Act is to ensure that a credit report is fair and accurate.

Of course, Mr. Grantham thought otherwise. In fact, how could an account be delinquent when the balance due was $0? It’s like having a traffic light with both the red and green lit up at the same time – it’s confusing and can’t be right.

Those inaccuracies and inconsistencies were troubling to the court, which gave Ms. Grantham the go-ahead to keep her case alive.

Review Your Post-Bankruptcy Credit Report With A Sharp Eye

It’s no easy task to read a credit report, especially the one you get after bankruptcy. Chances are pretty good that your financials were a mess before your case was filed, which leads to reports that are even more difficult that would otherwise be the case.

Nonetheless, it’s important to spend the time reviewing and understanding your credit reports. Correcting errors and ironing out the rough spots will maximize the value of your fresh start – and keep you on the road to a strong financial future.

Learn Your Student Loan Rights (FREE)

Enter your email address to get my free 6-part Student Loan Roadmap delivered to you by email.

Powered by ConvertKit
By |December 4th, 2012|

About the Author:

I've been a consumer protection lawyer since 1995, working to help people end their bill problems. I'm a faculty member at the Student Loan Law Workshop, a nationally recognized speaker, and a long-time member of both the National Association of Consumer Bankruptcy Attorneys and National Association of Consumer Advocates.
Share1
Tweet5
Pin
Share5
Reddit