When you file bankruptcy, you should always do so with the knowledge that the bankruptcy will report on your credit for seven to ten years. However, even though bankruptcy solutions may negatively affect your credit score, all of your discharged debts will stop reporting as in default or late and will instead report as settled. Because of this, your credit score has the potential to actually go up once your bankruptcy is filed.
Unfortunately, credit reporting is not always reliable and, in certain cases, some creditors may fail to report your debt as settled and so the debt will continue to be an unnecessary negative mark on your credit. Some creditors may even continue to try to collect on a discharged debt, which is violation of federal bankruptcy laws and can lead to legal penalties.
Investigation into creditors wrongfully reporting discharged debts
The New York Times recently reported¹ that the Trustee Program² of the United States Department of Justice (DOJ) have initiated investigations into several large financial institutions for wrongfully continuing to report discharged debts as delinquencies on credit reports. These banks are also pressuring the debtors to pay off these debts—despite the bankruptcy discharge—in order to remove the negative mark from their credit.
These creditors are refusing to comply with the terms of bankruptcies and, thankfully, an experienced bankruptcy attorney can help you resolve such issues. At times, a strongly worded letter from an attorney is enough to convince smaller creditors to comply with the terms of the bankruptcy. In other situations, especially involving larger banks, an attorney can help you file a legal claim against creditors and can help you receive compensation for any losses you suffered due to the inaccurate and unlawful reporting.
Contact an experienced Long Island bankruptcy lawyer for assistance today
Having unnecessary delinquent marks on your credit report can cause your score to continue to plummet, which can cause challenges in renting an apartment, receiving financing for a car or home, or even qualifying for certain jobs. Do not risk having inaccuracies on your credit after a bankruptcy. To make sure your creditors are complying with your bankruptcy, call the Long Island office of experienced bankruptcy attorney Ronald D. Weiss at 631-296-0309 for help today.
¹http://mobile.nytimes.com/blogs/dealbook/2014/11/12/debts-canceled-by-bankruptcy-still-mar-consumer-credit-scores/?_r=0&referrer
²http://www.justice.gov/ust/