David O. Carter, a judge in the U.S. District Court for the Central District of California, is requiring the three major credit-reporting bureaus, Experian Group, Equifax and Transunion, to clean up and correct the credit files of those individuals who have filed for bankruptcy and have received their discharge. This is a major step in allowing those individuals to truly rebuild their credit after filing for bankruptcy.
When an individual files for bankruptcy, he or she is seeking to have their debt discharged and to rebuild their credit score. As of today, on the average, a person's credit score goes up by about 70 points within a year of filing a chapter 7 bankruptcy. A debt listed on an individual's credit report after bankruptcy should only state that the debt is discharged. Nothing else. Many creditors, however, are not correctly updating their information because they are either incompetent or they are intentionally violating the court's discharge order by continuing to show negatives statements on the individual's credit report. This is what Judge Carter is trying to fix. He is making it the responsibility of not only the creditors, but of the 3 credit-reporting agencies as well.
The most common phone call I receive from an old bankruptcy client of mine is how to get a debt removed from their credit report. It used to be that they would only have a few options. One option would be to call the credit-reporting agencies themselves. This option requires a lot of time and effort on the individuals part. Another option would be to use a company to help them repair their credit report. I have often referred clients to this website Consumer Credit Advocacy, Inc. Now it appears that there should be fewer and fewer complaints of bad debts creeping back on an individual's credit report after they have received their bankruptcy.
Comments