Rebuilding Your Credit

[dogman]

My BK discharge date is 11/05 but I have been making payments on an auto, which I didn't reaffirm, and the bank has been updating the DOLA on a regular basis.  Is that a violation?  Can a creditor continue to report payments and update the DOLA after the BK filing or discharge date?

[RobertEG]

Was this debt included as a debt specificallty discharged  in your BK?  Apparently not, since you are still paying.

In that case, yes, the credtitor would be entitled to report current activity on the account.

[chasmith]

Many auto lenders (including my former lender) stop reporting once included in bankruptcy, even though the borrower is doing a "drive through" and paying on the loan.  I had wanted the good line and wound up letting them have the car since it was IIB and they insisted on non-reporting.

Why don't you want the reporting?  Who is the lender?

[dogman]

It is IIB. Reporting a payment and updating DOLA when it's IIB is killing my scores. FICO treats it as a recent late payment.

[dogman]

The lender is Wells Fargo/Wachovia.

[chasmith]

I see what you mean dogman.  I had the problem of a couple of creditors (CapitalOne CC was one) simply updating zero balance monthly.  That had the same effect on scores. 

The situation is this - you don't owe the bank the money because the debt was discharged in bankruptcy.  The bank retains its security interest in the car.  So until the loan is paid off and you gain clear title, the bank can exercise it's rights as the secured creditor to repossess.  This is an area where I've not been able to find clear unambiguous binding legal references.  One concern - some lenders will refuse to let you keep the car and continue paying if you don't reaffirm the debt.    Ford Motor Credit for example says in their loan agreement that filing bankruptcy is an event of default and use that to give them the right to repossess.  So pushing Wachovia on this might trigger a repossession. 

I wound up doing a direct dispute letter with the creditor to get it to subside. 

Here's what I might say in a letter to Wachovia:

This account was discharged in Bankruptcy on XX/YY.  I have chosen to keep the vehicle that secured the loan and make the required payments but did not reaffirm the loan.  My obligation on the loan is therefore discharged and your continued credit reporting constitutes collection activity in violation of the permanent stay.  To cure this violation you must correct all reporting to reflect last activity on this debt no later than the date of the Bankruptcy discharge.

[dogman]

Thanks chasmith!  This is a great letter!  They can't repossess because I just paid it off and received the title which brings up another issue.  The closed date on my reports is 09/2010.  Shouldn't  the closed date on my CRs be no later than the discharge date?