ColSandurz

Bankruptcy & Charge-Off's

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I've done a bit of reading, both on this forum (http://www.creditinfocenter.com/community/topic/242666-negative-reporting-on-discharged-debts-updated/) and elsewhere (specifically the Lovern and McCorkell letters referenced on this forum), but am still unsure as to whether a creditor can list a discharged debt as charged off.  

 

I filed my bankruptcy on 2/28/13, and it was discharged on 6/14/13.  According to my most recent credit reports (pulled just a few days), one of my creditors shows me 30 days late as of February, 60 days late as of March, No Data in April, and then the debt Charged Off (CO) in May.  Is this allowed?  If not, what can I do to fix it?  Thanks!

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Notify the credit bureaus so that they can list the account as included in BK.  Sometimes creditors simply stop reporting once a consumer files.  

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Notify the credit bureaus so that they can list the account as included in BK.  Sometimes creditors simply stop reporting once a consumer files.  

 

Sorry, I should have mentioned that this account shows as "included in bankruptcy" (IIB), and yet it also shows as late and eventually charged off (after the bankruptcy was filed).  So I'm wondering if that's allowed?

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If the CO was 5/13, no problem.  Its the date of discharge that governs.

 

And besides, as long as the STATUS is IIB, that trumps everything anyway.

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If the CO was 5/13, no problem.  Its the date of discharge that governs.

 

And besides, as long as the STATUS is IIB, that trumps everything anyway.

 

Sorry - not sure what you mean by "no problem" - do you mean that there's nothing I can do?  I thought that once I file for BK, they can't really do anything like list my account as past due or charged off (i.e. automatic stay) and then after the BK is discharged that automatic stay turns into an permanent injunction (or something along those lines) ?

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They can report the "...30 days late as of February, 60 days late as of March, No Data in April, and then the debt Charged Off (CO) in May..." because those months were prior to the discharge date.  

 

After the discharge date, all they can report is IIB.

 

If what your saying is that AFTER the discharge date, they went back and changed the status for months PRIOR to 6/2013...you might have a valid argument...but...since IIB trumps everything, negative status prior to 6/2013 will not do any more damage to your credit scores.  IIB is the ultimate baddy.

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Any post-discharge negative entry on a credit report (such as charge off) violates the discharge injunction as an impermissible collection action.

 

How do I see when they added the negative entry though?  I'm assuming if after the June discharge they went back and adjusted it to show it charged off in May, that would be a violation, but how can I tell?  And then what can I do about it?

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How do I see when they added the negative entry though? 

That's the problem.  IF you have a copy of your credit reports directly from the 3 CRAs prior to filing BK, and copies after filing BK you might be able to show that they changed.  However, if all they changed was pre-BK status, that's not much of a violation.  Also, some courts consider credit reports as heresay since they're difficult to substantiate.

 

As long as they're not actively trying to collect on debts that were IIIB, I suggest you just move on.  As I said, pre-BK negatives are trumped by IIB when it comes to credit scores.

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Sorry, after a bit more research, I thought that it was the filing date that prevents further activity (i.e. automatic stay).  From what I can tell, a charge-off after the filing date shouldn't be allowed, should it?  

 

Additionally, I just looked, and I have a credit report that I ran for Experian on 8/6/2013 (well after my discharge date) that shows 30 days late in February, and then closed in March and April (and no data beyond that) - but a more recent credit report from Experian shows 30 days late in Feb, 60 days late in March, No Data in April, and Charged Off in May.  Obviously, it would appear that Valley National and/or Experian made changes after the discharge date, so what can I do?

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As long as the debt shows IBB and a 0 balance, you should be fine regardless of the actions taken by the creditor. If the tradeline does not show IBB and a 0 balance, you start by disputing that with the CRA. If it comes back as verified, then you send a nasty 623 letter to the creditor telling them to correct the tradeline or be brought in for violations of the BK laws (for continued collection in violation of the automatic stay) as well as FCRA violations. That will get them to change the final action on the debt to IBB and make it a 0 balance.

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Also realize that for individual tradelines, the DOFD is the one that rules when it comes off your report, not the BK date and it is 7 years for the tradelines themselves. The only tradeline that stays on for 10 years of the actual Ch. 7 BK filing.

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Also realize that for individual tradelines, the DOFD is the one that rules when it comes off your report, not the BK date and it is 7 years for the tradelines themselves. The only tradeline that stays on for 10 years of the actual Ch. 7 BK filing.

 

Sorry - I have no idea what you mean by this (including what a DOFD is)?

 

Also, while the listing on the Experian report does show as IIB and a $0 balance, I'd still rather just get it fully correct - does that make sense?  It seems that this is an issue that has come up before (per the Lovern and McCorkell letters).  Am I in the right here in that the creditor should not be listed it as further late or charged off after the filing date, and if so, how can I get them to fix it?

 

Thanks!

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DOFD = Date of first delinquency. Trade lines stay on you reports for 7 yrs from that date.

And again, IIB trumps everything. Lates, COs, etc don't matter. As long as the tradeline says IIB, nothing else matters.

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DOFD = Date of first delinquency. Trade lines stay on you reports for 7 yrs from that date.

And again, IIB trumps everything. Lates, COs, etc don't matter. As long as the tradeline says IIB, nothing else matters.

 

Thanks for the information.  While I get that the account will still show IIB and this trumps everything else, I'd still like to get the history accurately noted, if thats even possible.

 

This is the latest response from the creditor: "please be advised that we have reported the account properly in accordance with the Fair Credit Reporting Act §623 Responsibilities Of Furnishers Of Information To Consumer Reporting Agencies [15 U.S.C. §1681s-2] (a) Duty of Furnishers of Information to Provide Accurate Information.  This section generally states that the "furnisher of information", <CREDITOR NAME REDACTED BY ME>, must not furnish inaccurate information to the consumer reporting agency.  Therefore, as the above noted account was past due in payment, you did file for bankruptcy protection and we did charge off the account, we are reporting the account properly to the credit bureaus."

 

However, as previously stated in one of my responses to my initial post, they definitely didn't report this information until well after the BK was discharged.  While they might have charged it off, I still thought that negative reporting (which certainly the 60 days late is and I think the charge off is also) was not allowed after a BK was filed??

 

Any thoughts or advice?  Thanks!

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If this was not a BK debt, then the 60 days and charge off status would matter. However, the IBB status trumps those so most scoring models and credit funishers will not look at the 60 day or charge off thing. In other words, once you nuke your credit report, the collateral damage does not matter.

Now, since this was probably a chapter 7, the actual case stays on your report for 10 years but the individual tradelines stay on for 7 years. The reality is though, once you start to rebuild slowly, the older tradelines will not matter.

I think you are spending too much time on what is really a non-issue. You will not raise your score too much by removing these tradelines (or much that matters) and technically, the are reporting correctly which is all they are required to do.

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If this was not a BK debt, then the 60 days and charge off status would matter. However, the IBB status trumps those so most scoring models and credit funishers will not look at the 60 day or charge off thing. In other words, once you nuke your credit report, the collateral damage does not matter.

Now, since this was probably a chapter 7, the actual case stays on your report for 10 years but the individual tradelines stay on for 7 years. The reality is though, once you start to rebuild slowly, the older tradelines will not matter.

I think you are spending too much time on what is really a non-issue. You will not raise your score too much by removing these tradelines (or much that matters) and technically, the are reporting correctly which is all they are required to do.

 

I guess my issue here is that everyone tells me something different about whether they are reporting correctly or not.  I've posted this question on a few forums, as well as done as much research online as I could, and there doesn't seem to be any clear consensus about whether creditors/furnishers can report things like late or charged-off after a BK filing.  Some places say they can, some say they can't.  It'd be great if there was some rule or law or regulation that addressed this specifically, but I'm guessing at this point that such a thing doesn't actually exist, since if it did the answer would be very clear cut.  Oh well - thanks for your input though, it is greatly appreciated.

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If, say, your BK discharge was in May 2014, and they reported you late in June, July, and August of 2014...THAT would be incorrect.

 

If, however, your discharge was in May 2014, and they went back and reported you late in Jan, Feb, Mar, and April 2014...no harm done.

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