Fixing Mistakes on Credit Reports Post-Bankruptcy
I offer a service that few, if any, bankruptcy attorneys in Cleveland offer: For an additional fee, I will pull your post-bankruptcy credit reports from all three credit reporting bureaus and ensure that all of your debts are listed as discharged in bankruptcy.
The creditor has a duty to make sure they mark these debts as discharged, but in my experience (about 40% of the time) at least one or two of them do not actually follow through on that duty.
Why Creditors Don’t Fix Credit Report Mistakes
There are many reasons why this happens. For instance, creditors may be lazy or disorganized, may not understand their legal duty to mark these debts as discharged, or may even deliberately avoid performing their legal duties because they do not want to do something that would help someone who declared bankruptcy on them.
Hopefully, your case falls into the approximately 60% of people whose post-bankruptcy rights get respected by their creditors. If you are not, your creditors are violating what is called the “discharge injunction,” which is just a fancy way of saying they are violating the bankruptcy court’s order that says your debts are wiped out. Obviously, this is bad because it hurts your ability to repair your credit after bankruptcy.
What if Creditors Violate the Discharge Injunction?
If your creditors violate the discharge injunction, you have two options. First, you can file a dispute with the credit reporting bureau that explains the issue and attach your bankruptcy paperwork showing them that the debt was listed in bankruptcy and you got your discharge. Most of the time the creditor will not respond to the dispute letter, at which point you automatically win and the credit reporting agency will fix the record.
This is the first option you should use because it is free, quick, and relatively easy. However, if multiple creditors have not respected your right to have your debts marked as eliminated, that means you would have to file multiple disputes with multiple credit reporting agencies to get the problem solved.
The other option is to sue the creditor for violation of the discharge injunction. However, this process is not free. You will have to pay me a small retainer to go forward, which you may recover if we obtain money from the lawsuit. Furthermore, typically your bankruptcy case has closed at this point so you would have to pay $260 in court filing fees to reopen the case in addition to the filing fee for the new lawsuit itself.
If the lawsuit actually goes to trial, which is almost certain not to occur, the process would take months and months. However, most of the time this sort of case will reach a quick settlement.
You will by no means get rich off this kind of lawsuit but you could get the debt marked properly in your credit report and get a small amount of money to reimburse you for having your rights violated. Apart from the initial retainer you paid me, the case would not involve any other attorney’s fees because those would be paid out of the settlement proceeds.
Need to Fix Your Credit Report?
Sometimes maneuvering through the financial landscape can be tricky and you need help. This is okay and understandable. If you’d like a free consultation from an experienced Cleveland bankruptcy attorney, or if you have questions about cleaning up mistakes in your credit report after bankruptcy, please call me at 216-526-0309.
You can also reach me online or request a callback if that’s more convenient.
