Current Article Subscribe

Bankruptcy and Credit Reports: The real story Part I

By Carmen Dellutri, Attorney at Law on Jun 1, 2007 in Credit Reports, Debt Collector Abuses, Discharge Violations, Florida, General Bankruptcy Information

Recently, an insider at Equifax, one of the three main credit reporting agencies, stated that consumers may not realize the impact of having a Bankruptcy on your credit report. This insider is Neil Munroe, and he is the external affairs director at Equifax. As a board certified consumer bankruptcy attorney who has sued more than my fair share of creditors, I am a bit cynical whenever a creditor or credit reporting agency issues such a self-serving statement.

Usually, a statement issued has some ramifications which will benefit the company. This statement is designed to throw consumers another red-herring. The logic behind the statement is to scare consumers who are considering bankruptcy into thinking that they will never receive credit again or that they will only receive credit at very unfavorable interest rates. Nothing could be further from the truth. You and I both know that creditors only make money when they are lending money and receiving interest on that money. It is a very competitive industry and these creditors cannot afford to throw all consumers who file bankruptcy to the curb. The idea is ridiculous.

What is really going on is much more interesting. Debtors and their attorneys are starting to use the Fair Credit Reporting Act to their advantage and making the Credit Reporting Agencies follow the law. Obviously, following the law hurts their bottom line because the lawsuits are starting to come and they will not stop until these reporting agencies and creditors fix their problems. Their problems and innocent mistake are one of the real reasons that approximately 40% of individual credit reports have mistakes.