Dispute or Not Dispute??

[midnite_7]

Hello.....I am having a bit of trouble tying to figure out how accounts should be reporting to the CRA after filing BK.  I filed in July 2013 and have a few accounts that in the "Account Status" of my reoprt are listed as 120+ past due, 61-90 days past due or Charge off.

All of the accounts are showing $0 past due and $0 balance. All other accounts are reporting correct showing account "Included In Bankruptcy".  My delima is this....most of the accounts showing the late or charged off status were reported in Aug 2013, although one does show charge off as of Sept 2015!  

Would it help me or hurt me (score wise) to dispute the account status to show IIB or should I just let them be and fall off after the seven years?  I am not sure what affect it would have if I were to have those accounts update to IIB since it has almost been three years since they have been reported.  I don't know if it is worth hitting the "bee hive".  ANY advice would be greatly appreciated.  Thanks!!

I had this posted in the Bankruptcy section for a week with no replies so I figured I would give it a shot here.......

[RobertEG]

The BK discharges the debt, not prior delinquencies.

The controlling factor is whether the derog occured prior to the BK.

A creditor cannot, for example, take a CO after a BK discharge, but if taken prior to the diischarge, it remains a prior fact of life, and can continue to be reportted to the CRAs.

If the debt has now been updated to show $0 balance, the fact that it was discharged via BK as opposed to your payment of the debt is not basis for asserting any error in not deleting the pror derogs from your credit report.

Care should be taken when disputing the reporting of a charge-off.

The creditor does not report the date that a charge-off occurs.  When they do report, it is only that they have, at some time in the past, taken a charge-off.

Reporting of a charge-off then requires that they additionally notify the CRA within 90 days of the DOFD on the account.  They do not notify the CRA of whether the CO occured before of after any filing for BK.  Thus, dont use the date of reporting as an asserition of the date they did a charge-off.

[midnite_7]

Thank you for the reply!!  I think I understand what you are saying.  Would it make a difference if the BK was filed before the charge off took place?  I was under the impression that when BK is filed all crediotrs are to cease reporting and have a status of IIB on the accounts.  Is that not correct? 

Obviously my credit report has taken a hit, but I am well on the way to rebuilding. I just didn't know if it is hurting my score to have the status of these accounts as charge offs and/or 120+ late, rather than the status read IIB, since these accounts are updating every month.  These accounts have been reporting that way since Aug/Sept 2013.  Do you think that the affect on my score from the status has run its course? Or since it is updating every month it is still having as much of a negative impact as if it happpened last month?

[RobertEG]

The FCRA does not direclty state how debts discharged under BK must be reported.

The balance must be updated to $0, as there is no longer a debt. FCRA 623(a)(2).

As for reporting of delinquencies, case law has held that once the debt is discharged by BK, no further delinquencies, including a charge-ff, can be reported to a CRA if they occur after the BK is discharged.  It has been interpreted by the courts as a violation of FCRA 623(a)(1).

Thus, while a creditor is required to charge-off a debt after a BK, they cannot then also report that charge-off to a CRA.

 They may properly inform you that they must take a charge-off, which is true, but the courts have held that they cannot report that fact to a CRA.

[RonM21]

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@midnite_7 wrote:

Thank you for the reply!!  I think I understand what you are saying.  Would it make a difference if the BK was filed before the charge off took place?  I was under the impression that when BK is filed all crediotrs are to cease reporting and have a status of IIB on the accounts.  Is that not correct? 

Obviously my credit report has taken a hit, but I am well on the way to rebuilding. I just didn't know if it is hurting my score to have the status of these accounts as charge offs and/or 120+ late, rather than the status read IIB, since these accounts are updating every month.  These accounts have been reporting that way since Aug/Sept 2013.  Do you think that the affect on my score from the status has run its course? Or since it is updating every month it is still having as much of a negative impact as if it happpened last month?

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The effect it has should be slowly wearing as time goes on, but even way down the road before it comes of, it will still have some sort of negative impact on the score unfortunately.