Negligent Credit Reporting of Discharged Debt Not Punished In MA

14 Oct Negligent Credit Reporting of Discharged Debt Not Punished In MA

A creditor must act intentionally to collect or enforce a discharged debt, and with knowledge of a bankruptcy discharge, before sanctions in Massachusetts are appropriate. This must be proven by clear and convincing evidence (although it need not include a specific intent to violate the discharge). Therefore, a negligent inclusion of false data in a credit report is not actionable – especially where it was promptly corrected upon demand. So ruled Judge Somma in In re Schlichtmann, 2007 Bankr. LEXIS 3258 (Bankr D MA 09/25/07).

Credit reports containing discharged debts is a growing problem for honest but unfortunate debtors. Vigorous and focused work by debtor’s counsel is required to prove intentional or reckless disregard of a bnkruptcy discharge by the erroneously reporting creditor. These efforts are not always successful, although better results might be achieved with suits under credit reporting laws.

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L. Jed Berliner practices exclusively in consumer bankruptcy, foreclosure defense, and related consumer protection litigation such as credit card defenses and suing debt collectors. He established his Springfield, MA practice in 1988. Attorney Berliner is a regular and active contributor to the Bankruptcy Law Network, the Bankruptcy Roundtable, and the National Association of Consumer Bankruptcy Attorneys, three specialized consumer bankruptcy forums on the Internet, and is an informal mentor to regional practitioners. He is recognized by his peers as an expert in consumer bankruptcy issues. He thoroughly enjoys being rated "excellent" in his client surveys.

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