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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