LadynRed

Negative reporting on discharged debts - UPDATED

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There are no exceptions. The whole of the Goodfellow case is not the point you're making, the point is that reporting negative info, AT ALL, on a discharged debt was deteremined to be a violation of the discharge injunction, otherwise the judge would never have nailed Discover for sanctions !

I have seen more on this bankruptcy reporting recently, but case law is scarce. Your best option may just have to be dragging them to court for contempt and let the judge explain to them why their reporting is WRONG.

The fees lawyers charge varies so much, its hard to say what is 'normal'. If the creditor loses, and they likely will, then they will pay your attorney's fees and court costs on top of the damages you can ask for and the fines the court can impose.

The FTC Staff opinion isn't binding, but they are still wrong. They cannot report it as a charge-off AFTER your filing if it was not in charge-off status BEFORE you filed. All creditors have to write off bankrupted accounts, but they do not have the right to report it.

I'll see if I can dig out more info for you to fight them on this. I really think you'll have to let the bk court slap them.

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Great POST!!!!! I am reviewing my cra reports...Do you have a sample letter that we can use to dispute this unique situation (Negative reporting on discharged debts) ??

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I appreciate that. I think these guys are mostly trying to wear me down, but even if it takes me a while to come up with the money to pay the attorney, I'm going to fight them.

I wonder if it would be worthwhile to file a complaint to the FTC against the CRA's for allowing this reporting? Am I barking up the wrong tree on that one?

Thanks again, LadyNRed.

Wendell

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Great POST!!!!! I am reviewing my cra reports...Do you have a sample letter that we can use to dispute this unique situation (Negative reporting on discharged debts) ??

I was wondering this myself...

Thank you very much LIR for the info.

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LadynRed,

In 2004 I filed a BK and when going though my Credit Reports last couple of weeks I found that many of the the CA,s had not shown as IIB after disputing, many were just Deleted. But one CA was reporting to TU only and not as IIB after I disputed with them they now are showing on EX as paid,THEY were not there pre-Dispute. Have they violated they BK stay and if so, what should I do now

Thanks for your time

Status: Paid,Closed/Collection account.

Date Opened: 09/2001

Type:Collection

Credit Limit:$175

Date of Status: 03/2007

Terms: 1 Months

High Balance: NA

Reported Since: 03/2007

Monthly Payment: $0

Recent Balance: NA

Last Reported Date: 03/2007

Responsibility:Individual

Recent Payment:NA

Your Statement: NA

Account History: Collection as of Mar 2007

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There are no exceptions. The whole of the Goodfellow case is not the point you're making, the point is that reporting negative info, AT ALL, on a discharged debt was deteremined to be a violation of the discharge injunction, otherwise the judge would never have nailed Discover for sanctions !

So, let me ask a question, if an item is on your report and was dishcarged, and it says the 'condition' is derogatory, does that mean that that is a violation? I have 6 accounts on EQ that have been discharged since 2003 but still read derogatory (they have been removed (except one) from the other 2 CRA's along time ago) and I have another derog that waas dishcarged in 2003 also on my experian that reads condition: derogatory

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Hi-

I also have the same question. Should debts included in BK be reported as derogatory or closed. And should the date last reported be no later than the date of the BK?

Thanks for your time.

There are no exceptions. The whole of the Goodfellow case is not the point you're making, the point is that reporting negative info, AT ALL, on a discharged debt was deteremined to be a violation of the discharge injunction, otherwise the judge would never have nailed Discover for sanctions !

So, let me ask a question, if an item is on your report and was dishcarged, and it says the 'condition' is derogatory, does that mean that that is a violation? I have 6 accounts on EQ that have been discharged since 2003 but still read derogatory (they have been removed (except one) from the other 2 CRA's along time ago) and I have another derog that waas dishcarged in 2003 also on my experian that reads condition: derogatory

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THE point here... there can be NO DEROGATORY information reported on a discharged debt - period. If the information is HISTORICAL, meaning BEFORE your BK filing date, it can stay.

There can be NO COLLECTIONS REPORTED on a discharged debt. Any collection listed AFTER a bankruptcy is a VIOLATION, there can be NO COLLECTIONS ! If the collection was there BEFORE you filed, then it MUST be reported as 'included in bankruptcy', ZERO DUE. It should also not show as derogatory individually, the bankruptcy itself trumps it. The DATE should NOT change from the date that was reported before the bankruptcy.

CKLINEN - that reporting is a violation, nail them for it !

Shan2themax - there can be no derogs on a discharged debt. If it does not say 'included in bankruptcy' it is WRONG. Any accounts included in the BK should be listed as CLOSED if they are, in fact, closed. There can be no 'open' collections.

PJFAN - same answer. The 'date reported' could be recent IF they are still reporting, most creditors do not once you've filed BK, they might continue to report for a short time, depends. They have ZERO reason to continue to report since the BK completely severs your relationship with that creditor (generally).

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I think I know what the answer will be.. but I am still going to ask as I read all 4 pages of this thread and still somewhat iffy.

For example, on my TrueCredit report for Experian, when I look at the summary it says 12 Derogatory accounts (which are the ones discharged in my BK). When I review the details under each account, they all say "IIB" and meet the other requirements they should show ($0 balance, no pymt history, etc).

From the way I understood what I was reading, it is wrong for them to list it under the derogatory category? Or is that ok since all the details of the accounts are technically correct?

Thanks for the clarification... I love the help I have received from this board in a short time.

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If they were derogatory before you filed, and the entries are accurate, then they will still be historically derogatory. For the most part though, the bankruptcy will trump the individual entries.

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I have a question. I am so mad about this too:

My Dentist filed a case against me for money owed. He still tried to collect after my Chapter 7 was filed (he sent 2 late notices) and the Judgement against me which shows up on my credit report is still open with the original amount owed. I had paid it down to $696 before I filed for bankruptcy but on my credit report it shows $1,424.00.

I called the Court where the judgement was filed and they claim they did not get any notice of the bankruptcy.

What the heck is going on here? Before I contact my Lawyer (mine charges for any extra time spent on a case) what should I do? I KNOW my Dentist received the bankruptcy notice, but it seems as though he is trying to ignore it.

Any advice?

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I have a question. I am so mad about this too:

My Dentist filed a case against me for money owed. He still tried to collect after my Chapter 7 was filed (he sent 2 late notices) and the Judgement against me which shows up on my credit report is still open with the original amount owed. I had paid it down to $696 before I filed for bankruptcy but on my credit report it shows $1,424.00.

I called the Court where the judgement was filed and they claim they did not get any notice of the bankruptcy.

What the heck is going on here? Before I contact my Lawyer (mine charges for any extra time spent on a case) what should I do? I KNOW my Dentist received the bankruptcy notice, but it seems as though he is trying to ignore it.

Any advice?

1.) Has your bankruptcy actually been file?

2.) If so, has it been discharged?

When I filed in 2003, I was told that creditors were not allowed to contact me at all after I made the creditor aware that I was filing.

3.) If it has already been filed and/or dicharged, you should have a list of creditors that you filed bankruptcy on....

I would dipute with the CRA if you have filed and it is on your credit report.

Also, I was under the understanding (at least this is what my lawyer told me) that if you have any questions regarding the BK even past d/c, I could call and it was part of the bk.

Someone else would probably be better at addressing that issue though....

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1.) Has your bankruptcy actually been file?

2.) If so, has it been discharged?

When I filed in 2003, I was told that creditors were not allowed to contact me at all after I made the creditor aware that I was filing.

3.) If it has already been filed and/or dicharged, you should have a list of creditors that you filed bankruptcy on....

I would dipute with the CRA if you have filed and it is on your credit report.

Also, I was under the understanding (at least this is what my lawyer told me) that if you have any questions regarding the BK even past d/c, I could call and it was part of the bk.

Someone else would probably be better at addressing that issue though....

It was filed, the dentist is on the list (including the court he filed the case against me with) and discharged. This is the only creditor I have issue with, the others reported correctly.

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It was filed, the dentist is on the list (including the court he filed the case against me with) and discharged. This is the only creditor I have issue with, the others reported correctly.

I was told by my lawyer (before/after it was discharged) to send a letter to the CRA's telling them that the debt was included in bankruptcy, and to cc the original creditor also.... you may want to think about having him/her send them a letter (dentist)

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SisterGirl - the courts are not automatically notified of your BK filing. When EXACTLY did the lawsuit happen ? If they filed the lawsuit during your bankruptcy, it was automatically null and void as a violation of the automatic stay. If it was filed AFTER your discharge, then it is still null and void as the debt was discharged. If the suit was pending when you filed BK, your lawyer should have filed a 'suggestion of bankruptcy' with that local court to stop the lawsuit from going any further.

Discharging the debt doesn't automatically get rid of an existing judgment, the court must be notified of the bankruptcy. So, what you need to do, and you don't have to have your lawyer do this - is file a motion to vacate the judgment and state your bankruptcy as the reason -debt discharged in bankurptcy. Make sure you attach a copy of your creditor matrix and your discharge letter.

Now, if this dentist and/or his collections people went forward with the lawsuit during your automatic stay or after your discharge, I'd go after them for their illegal actions.

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If they were derogatory before you filed, and the entries are accurate, then they will still be historically derogatory. For the most part though, the bankruptcy will trump the individual entries.

They actually were perfect before the BK. They are showing late after my initial filing, and Wells Fargo is actually showing late 2 months after the discharge. Should I dispute these with the credit bureau or the original creditor?

Thanks for your help LNR :)

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Any lates showing with dates AFTER your BK filing is a violation. If you haven't disputed with this with the CRA's yet, do that first, then go after the OC's.

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Thank you LNR.. That is what I thought. It is only showing on EXP.. I just sent it as part of a dispute letter on Monday. Hopefully it gets cleared up quicky... if not, Wells Fargo here I come!! :-D

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Can you answer this...Americredit was a co-signer with my ex-husband who was responsible for making the payments after our divorce in 2000. I filed a chapter 13 in 2002. They repoed the car becuase he wasn't paying (the car fairy gave him a free car for months!) They were able to verify but the court did not allow them to collect from me. They report on my CR as "wage earner plan" even though it was dicharged in 2005 and show a balance of almost 4,500.00 which is reflected in my installement balances. Readling your previous posts shouldn't it read discharged in bankruptcy with a zero balance? I've tried to dispute this annually but it comes back as verified from OC. I've disputed this once again and I am waiting on an outcome. Do you have any further advice on how to dispute this?

Another question can a credit bureau show you as filed and dicharged therefore listing the debt twice. Equifax did this, I disputed and they changed it to filed instead of discharged. I've submitted a new investigation to have it correced.

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This subject comes up over and over again daily. Hopefully this will provide the needed answers.

The most-asked question: 'How should debts included in bankrutpcy be showing on my credit reports ?'

The answer:

All debts that were included in your bankruptcy should be reporting with a ZERO balance, show ZERO due, show nothing past due after the date of your bankruptcy filing, and should be noted as "included in bankruptcy' or similar verbage. If the tradeline does not report this way, dispute anything and everything that is wrong.

If you have account history that includes lates and charge-off that occurred BEFORE you filed for bankrupcy, that history can legally continue to be reported. If there are incorrect dates, dispute it.

A discharged debt can NOT be late - ever. So if a creditor reports a late for a date AFTER your bankruptcy FILING date, and certainly post-discharge, dispute it.

Charge-offs. Per the FTC, if a debt was not in charge-off status BEFORE you filed for bankruptcy, it can NOT be reported as a charge-off AFTER your bankruptcy, The FTC Staff Opinion letter, Brinkerhoff-Lovern states the following:

While creditors are required to charge-off bankrupted debts for their internal accounting, they are NOT supposed to report that charge-off to the credit bureaus.

Any IIB tradeline that is not reporting properly, you must dispute first with the credit bureaus. If it comes back as 'verified', then you must dispute it directly with the FURNISHER of the information as is your right under FACTA. If they refuse to remove the negative entries on a discharged debt, then you are going to have to get tough and you MUST consider the possibility that you may have to re-open your bankruptcy case for a Contempt action against the furnisher.

NEGATIVE REPORTING ON A DISCHARGED DEBT IS A VIOLATION OF THE PERMANENT INJUNCTION OF YOUR DISCHARGE !

There is case law to support this. The case is Goodfellow vs. Discover Financial Services and you can read that case here:

http://207.41.19.195/scripts/show_matches....ings=Goodfellow

Pertinent to the reporting violations is the following from the BK court's decision:

So, what you must do if you are getting nowhere with a creditor/collector with disputes is to send them a Cease and Desist letter. In this letter you tell them that if they do not immediately cease and desist their negative reporting to the CRA's , you will file a Motion for Contempt and Request for Sanctions against them in bankruptcy court (name the district you're in). Per the Goodfellow case (cite the actual case name), negative reporting on a discharged debt is a violation of the permanent injunction of your discharge (list BK case number, filing date, discharge date) and as such they are in contempt of a Federal Court Order with their continued negative reporting on the discharged debt.

Besides the sanctions the BK judge can levy on the offenders, you can recover ALL attorney's fees, court costs and DAMAGES so don't be afraid to take the next step and actually file the Contempt Motion against them if they do not correct your reports.

The ONLY way we will stop this behavior of poisoning our credit files post-discharge and robbing us of our "fresh start", is to actually start going after these offenders in bankruptcy court where the bankrutpcy judges have a lot of clout.

My CR states Chargeoff after my BK, and some say Included in BK. I filed in 2004 and still have a balance amount of 11,953. Is this reporting right, or should it say 0

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If they are showing the charge-off date as being AFTER the bankruptcy filing, then YES, that is a violation. If the account was NOT in charge-off status BEFORE you filed, then they cannot report it as a charge-off AFTER either.

ANY inaccuracies in dates should be disputed.

What is the meaning of Chargeoff?. I am showing chargeoffs and BKs, Chapter 7

I also keep asking them to change that CitiMortgage is NOT included in BK, and that in fact my house was sold after the BK and before it actually went into Forclosure.

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I filed in 2004 and still have a balance amount of 11,953. Is this reporting right, or should it say 0

It is NOT right. It should NOT have a balance and they cannot report a charge-off unless it was charged-off BEFORE you filed BK. Dispute it.

Charge-off is just an accounting function. When an account is not performing (being paid), they move it to the non-performing (non-paying) side of their books, they write it off as a loss, and they get a tax break for doing so. It keeps stockholders happy because the company is not carrying around a bunch of bad debt. They will usually turn around and sell portfolios of bad debts to the junk debt buyers.

When you file for BK ALL debts MUST be included. You cannot exclude anything, so the notation of 'included in bk' IS correct.

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It is NOT right. It should NOT have a balance and they cannot report a charge-off unless it was charged-off BEFORE you filed BK. Dispute it.

Charge-off is just an accounting function. When an account is not performing (being paid), they move it to the non-performing (non-paying) side of their books, they write it off as a loss, and they get a tax break for doing so. It keeps stockholders happy because the company is not carrying around a bunch of bad debt. They will usually turn around and sell portfolios of bad debts to the junk debt buyers.

When you file for BK ALL debts MUST be included. You cannot exclude anything, so the notation of 'included in bk' IS correct.

So anything else other than saying included in BK is incorrect? And the chargeoffs shouldnt be on there as well. Will this raise my credit score a little just by changing these? Is this what the broker was talkena bout maken sure they say in cluded in BK?

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Anything other than a zero balance and "IIB" on the included debts is incorrect. They cannot report a charge-off AFTER your bankruptcy, even though they did charge it off.

Once all accounts show ZERO balance due and no charge-offs post bk, then yes, you may see your scores go up.

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