Credit after Bankruptcy
US Supreme Court:
"One of the primary purposes of the Bankruptcy Act is to give debtors a new
opportunity in life and a clear field for future effort, unhampered by the
pressure and discouragement of preexisting debt."
One - Experian credit reporting for an account DISCHARGED
"specific" bankruptcy dispute
If you immediately re-establish
credit, you can easily have a 700+
credit score 2 years after discharge and get a mortgage
as long as you have a good reason for the bankruptcy
(unemployment, medical, business failure, etc.)
creditors routinely violate the discharge order
and continue to report the discharged accounts as
charge-offs with delinquent balances.
Even when reported
CORRECTLY, 6 year old discharged accounts STILL
lower your Fair Isaac credit scores.
I have done some testing at the
Equifax site. The before, during, and after dispute
Beacon scores clearly indicated that each discharged
account costs you a few points. Whenever I have
some spare time, I will add more details. This
is an important part of my upcoming law suit against
Reporting as charge-off
will usually lower the credit scores significantly,
and in combination with a RECENT date it will destroy
This is NOT an occasional
credit reporting error, but just about all credit
reports with bankruptcies contain discharged accounts
Creditors often continue
to access your credit file and possibly lower your
credit scores - they do NOT have a permissible purpose
after the discharge.
You can demand $1,000 for each
violation. The creditor no longer has
a valid claim after the discharge. If they
were NOTIFIED of your discharge, go get your $$$.
Many readers have now received those checks.
Wells Fargo: SETTLED for $1,000 + deletion of UNAUTHORIZED inquiry
If you find any
incorrectly reported discharged accounts on your
credit reports, contact your bankruptcy attorney
bankruptcy lawyers are dumb as rocks, couldn't help
you if they wanted to and wouldn't help you if they
could. They just don't give a damn.
But, I recently
heard about a lawyer who actually resolved
his clients' credit problems.
So, call your lawyer
and see if he'll help. It's worth a try.
Subscribe to the
The on-line credit reports contain
more info, you can monitor the progress of your
disputes and you get notified of any re-insertions
after deletion. While I HATE to recommend
that you give your $$$ to the credit bureaus, NOT
subscribing and disputing will most likely cost
you much more if you use credit and insurance.
scores can result not only in higher interest rates,
but also higher insurance
rates and even declines.
you can't pay your bills and you qualify for discharge
of your debts, you should probably do so - avoid
the credit counseling services like the plague.
Do NOT sign up with any of these "non profit
consumer credit destruction services."
Whether it's Genus, MyVesta or any other fake
non profit, they all get paid by the creditors.
Usually creditors give 10% of your payments
back to those agencies, in addition to your "voluntary"
Joining one of those programs often results
in lower credit scores than if you discharge
your debts. Not only are you out the cash you give
them, but you destroy your credit with late payments
and "consumer credit counseling" notations.
While those CCC notations are ignored by FICO credit
scores, many creditors rate those notations similar
The most outrageous credit counseling disaster
is posted at 34 payments to Genus - interest
ONLY!!!???? (Capital One - NCO)
Even after complaints about Capital One with
the Federal Reserve Bank, the BBB and a Planetfeedback.com
complaint to the Capital One CEO, they STILL
- claim that only interest was paid
- demand $1,000 to settle the accounts
- refuse to provide accounting
- destroy the credit by reporting charge-offs
with delinquent balances, and upon the latest
dispute one account was even re-aged to a
Just say "NO"
to credit counseling - it does NOT pay to pay.
On 2/8/04 I reviewed a Trans Union FICO report. Only 24 months after Ch. 7 filing the FICO scores was 726!!!
Make sure you read the FICO Credit Scoring Basics!
One - Experian credit reporting for an account DISCHARGED
You can NOT tell from this report that the account
was actually discharged in 1996.
The June 2002 dispute
with Experian: "Please verify All dates and
NOTHING was corrected. How can this be, while
the 1996 Ch.7 discharge is reported on this same
incorrectly reported accounts
In the first dispute after the bankruptcy
I'm tempted to dispute all derogatory accounts as "not
my account." That's because a correctly
reported "included" account still lowers
the credit scores. I have a policy of not
lying and I've struggled with this for a while.
Then I noticed that the bureaus blatantly lie in
their answers to lawsuits. So I don't lose
any sleep over this. Of course you can also
use the Reagan approach: "I don't recall
...." Experian's online dispute reads
"no knowledge of account."
as I've followed my own and many of my clients'
struggles to get correct credit reports, I realized
that most people have excellent reasons to sue the
CRAs after only one or two disputes. It rarely
happens that all 3 bureaus correct all disputed
account after the first disputes. Even after
the 2nd disputes there is often at least one
creditor determined to report an outstanding balance
or re-age an account and cause major damage
to the credit scores.
Some judges really frown on "not
my account" disputes when the account IS yours,
and it can cost you your case. Unless you're
absolutely sure that you will not sue, stick with factual
After the dispute results are in,
you can dispute the remaining incorrectly reported accounts
through 2nd "specific" dispute. I'm
still reluctant to recommend suing after only one
dispute, although there really is no reason not
to. The FCRA doesn't require two disputes.
You could just point out each
incorrectly reported date, balance and notation
and tell them what it should be right on the
reports. In that
case send your "corrected" reports to
the bureaus with a "please correct as indicated."
It's a lot of work, and don't forget to make a
copy for your records.
I have been sending "specific"
disputes with lots of questions.
I'm still hoping to be able to get answers
some day, maybe in court.
Sample dispute for the above
"I am hereby disputing the credit reporting of the following accounts:
Capital One Bank 5291071313973...
On 6/6/02 I disputed this account
on-line and I requested that all dates and balances be verified. You
subsequently notified me that you verified the account and you made no
a) Please provide your verification procedure: WHO verified,
HOW, and WHEN?
b) "Status: Included in bankruptcy/Account charged off. "
The reporting of the account as "charged off" is incorrect. It is a
derogatory notation that lowers my credit scores.
My 05-96 bankruptcy
filing and subsequent discharge are on this Experian credit report and even
this SAME account refers to bankruptcy.
How did you
arrive at the conclusion that this charge-off is reported correctly?
"Date of Status: 04/2001"
This" Status Date" implies that the account was
charged off in 4/2001, which is also incorrect.
How did you arrive at the
conclusion that this date is reported correctly?
d) "Status Details: This
account is scheduled to continue on record until 5-2003."
indicates that you are aging this account as of 5-1996, and you are reporting it
for 7 years.
How does that relate to the "Date of Status:
e) "Account History: Charge Off as of 4-2001, 3-2001, 12-2000,
7-2000, 6-2000, 5-2000, 6-1996
Discharged Through BK Ch 7, 11, or 12
04/30/2001 to 02/28/2002"
The more recent the date of a charge-off or
bankruptcy, the greater the damages to my credit rating. Fair Isaac's credit
scoring software deducts more points for more recent derogatory
I had specifically requested that you verify all dates.
How did your investigator arrive at the conclusion that both the "04/30/2001 to 02/28/2002" bankruptcy and the many charge-off dates are reported
f) Why don't you have any procedures in place to prevent this
type of extremely damaging credit reporting?
g) You are reporting this
account in violation of the US Bankruptcy code.
The US Supreme
"One of the primary purposes of the Bankruptcy Act is to give
debtors a new opportunity in life and a clear field for future effort,
unhampered by the pressure and discouragement of preexisting debt."
reporting of this preexisting debt has destroyed this "clear field for future
effort."My damages include excessive interest rates, insurance rates and even
declines. Even if the account was reported correctly, it would still lower my
Why do you ignore this Supreme Court decision?"
Of course they never answer.
So now I make the disputes a little shorter,
but it is important to dispute all those incorrect
notations and dates.
I hope I'll be able to ask those questions,
suing Experian, Capital One and Providian
for exactly this type of reporting. The
blog of my suit
I settled with Providian in 1/04 and the Experian former AZ affiliate CreditData SW (Merchant Information Solutions) filed a Motion for Summary Judgment and provided me with many documents about the disputes. The judge denied the motion and I'm still waiting to get to discovery, probably sometime in 2005.
options -- if
the bureaus verify incorrect data
When creditors verify incorrect data
after your bureau disputes, they violate the FCRA
and they are liable for your damages.
I address the "after bankruptcy"
reporting in the federal law suit I filed on 3/19/03
against all CRAs, Fair Isaac and several
creditors, collectors, the FTC, FCC and the Federal
Reserve Bank of Richmond.
It is despicable that the bureaus have
absolutely NO procedures to prevent incorrect credit
reporting and creditors routinely ignore the discharge
It's even more despicable that the so-called "regulators"
fail to enforce consumer protection laws such as
the FCRA and FCBA.
I have found that it's difficult to find an attorney
to sue over just one violation and one bureau. But
it's not unusual at all to have an entire list
of violations by the time the 2nd dispute results
Chase v. First USA, Trans Union and Equifax
Plaintiff attorney: Bybee -- Cause: FCRA
filed in Phoenix
federal district court 1/8/03
First USA re-aged a 1992 discharged
account to a 1998 and 2000 collection/charge-off NOT "included" by TU and
Equifax. Both CRAs VERIFIED this incorrect reporting after numerous disputes by
My thoughts on attorneys
and Pro Se litigation.
I am NOT an attorney.
That's why nothing I publish is legal advice.
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