30 Sep Credit Reporting Agencies Told: Delete Bankruptcy Debts
You get your bankruptcy discharge, try to re-finance your mortgage, and are told you do not qualify because of a debt or debts still on your credit report. How can this be?
Carmen Dellutri has blogged on this issue.
It is called zombie debt, debt that will not die.
There are many companies which buy bad debts, for pennies on the dollar, so if they collect on a few of them, they still make money. The cheapest way to collect is to put that debt on your credit report.
The debt is re-inserted, under the name of the zombie debt buyer.
No expense for mail or phone calls. The bottom feeding debt buying companies are waiting for you to re-finance, figuring your back will be against the wall, you will pay them to keep the mortgage deal, as there will not be enough time for your lawyer to get relief in court.
Lawyers filed a class action, heard in California, for all people who had bankruptcy discharges.
Most people who have filed bankruptcy have zombie debt on their credit report. The Judge ordered the big three CRAs (Credit Reporting Agencies) Trans Union, Equifax and Experian, to change their systems to clear ALL debt from people who have bankruptcy discharges.
He put the burden on the CRA to show why it should carry a debt that pre-dates a bankruptcy.
Some debts should still be listed. If you re-affirm a debt, you are still legally liable, and your payments should be reported.
As always, you should keep up to date on what is on your credit report. Just because the Judge ordered it, does not mean the CRAs will comply.
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