Saturday, November 25, 2006
Why you should NOT send bankruptcy documentation to the credit bureaus
A client filed a Ch. 13 and he actually paid over $70,000 and every creditor and collector who filed a claim received 100% of what they asked for. In 2005 the payment plan was completed.
A month ago my client sent his Ch. 13 documentation to the CRAs and he requested that they update his reports accordingly. Experian did a pretty good job and immediately processed the disputes and updated the accounts, although quite a bit makes no sense.
TU and Equifax just got done, Equifax sent TWO investigation results, it sure is confusing.
Unfortunately, almost all accounts listed on the filing are reported with a current status referencing the Ch. 13. Nowhere is any indication that he PAID the accounts IN FULL.
What’s even worse, the student loans and mortgage he’s still paying on are ALSO listed as “included.”
While those loans are many years old and the student loans are almost paid off, we have this score factor:
The proportion of loan balances to loan amounts being reported on your installment accounts is too high
Apparently only the 3 months old auto loan is rated for FICO scores and the almost paid off student loans and the 8 year old mortgage are not factored into the scores. Not only does that impact on the installment B/L ratio, but the long account history is most likely also ignored.
Even some of the OLD student loans and an OLD “paid as agreed” Ford Motor loan—paid off BEFORE the bk filing—are listed as “included.”
Apparently the CRA employees just looked at the bk docs and marked accounts by the same creditor as included in the bk - without ever giving a thought to the fact that an account paid prior to the filing or paid AFTER the completion of the plan could not have been discharged.
It’s easy to make some copies of the bk docs and mail them to the CRAs. It’s a LOT more work to go through each report and dispute the accounts you WANT to have reported as included in bk, but definitely worth the effort.
So now we have to dispute all the accounts that were NOT included and we’ll try for a “paid as agreed” for the accounts that were paid 100% and not charged off prior to the filing. We’ll see what happens, we’ll be lucky if Experian doesn’t refuse the disputes as “previously investigated.”
I had to SUE to get Nelnet to report my student loan accurately as “paid as agreed” instead of discharged and it took some efforts to get my mortgage reported correctly too.
Do NOT send your bankruptcy documentation to the CRAs.
It’s a mistake that can’t be undone.
Credit - Collection - Economic News • (6) Comments • Permalink
