Accounts discharged in BK allowed to include 'Charge Off' after filing/discharge

[2b2rich]

In reading the stickie (linked below), I felt there should be more clarification.

Copy of FTC Staff Opinion Letter re: No reporting ...

An account that was discharged in bankruptcy can also be reported as Charged Off also IF it has actually been charged off by the OC.  This includes COs even AFTER discharge, so long as they are actually charged off.  In another letter dated June 3, 1999 (in which the Lovern letter was cited), it was clarified that it is only a violation if the account has not been charged off.

https://www.ftc.gov/legal-library/browse/advisory-opinions/advisory-opinion-mccorkell-06-03-99 

Hopefully this will help some.  I am not even sure how to verify if a Creditor has actually charged off an account after bankruptcy filing, but I also have one showing this and it was never even late much less charged off, at least before filing.  On another note, the 1999 letter does state the risk score assigned to an  IIB tradeline that also carries a charge off, is the same as one that does not include IIB.

(Admin/Mods if you could add this to the sticky in reference it might help those whose account(s) were actually charged off the headache of disputing the charge off).

[FireMedic1]

---

@2b2rich wrote:

In reading the stickie (linked below), I felt there should be more clarification.

Copy of FTC Staff Opinion Letter re: No reporting ...

An account that was discharged in bankruptcy can also be reported as Charged Off also IF it has actually been charged off by the OC.  This includes COs even AFTER discharge, so long as they are actually charged off.  In another letter dated June 3, 1999 (in which the Lovern letter was cited), it was clarified that it is only a violation if the account has not been charged off.

https://www.ftc.gov/legal-library/browse/advisory-opinions/advisory-opinion-mccorkell-06-03-99 

Hopefully this will help some.  I am not even sure how to verify if a Creditor has actually charged off an account after bankruptcy filing, but I also have one showing this and it was never even late much less charged off, at least before filing.  On another note, the 1999 letter does state the risk score assigned to an  IIB tradeline that also carries a charge off, is the same as one that does not include IIB.

(Admin/Mods if you could add this to the sticky in reference it might help those whose account(s) were actually charged off the headache of disputing the charge off).

---

When an account is listed as “Charged Off” on your credit report, that’s a negative. There are a number of circumstances when a creditor can charge off an account but they MAY NOT do so after you’ve filed for Bankruptcy or after you’ve received your BK CD. It’s illegal. No negative remarks or hits after the file date can be added to a credit report. BK laws have changed a lot since 1999.

[CH-7-Mission-Accomplished]

---

@FireMedic1 wrote:

---

@2b2rich wrote:

In reading the stickie (linked below), I felt there should be more clarification.

Copy of FTC Staff Opinion Letter re: No reporting ...

An account that was discharged in bankruptcy can also be reported as Charged Off also IF it has actually been charged off by the OC.  This includes COs even AFTER discharge, so long as they are actually charged off.  In another letter dated June 3, 1999 (in which the Lovern letter was cited), it was clarified that it is only a violation if the account has not been charged off.

https://www.ftc.gov/legal-library/browse/advisory-opinions/advisory-opinion-mccorkell-06-03-99 

Hopefully this will help some.  I am not even sure how to verify if a Creditor has actually charged off an account after bankruptcy filing, but I also have one showing this and it was never even late much less charged off, at least before filing.  On another note, the 1999 letter does state the risk score assigned to an  IIB tradeline that also carries a charge off, is the same as one that does not include IIB.

(Admin/Mods if you could add this to the sticky in reference it might help those whose account(s) were actually charged off the headache of disputing the charge off).

---

When an account is listed as “Charged Off” on your credit report, that’s a negative. There are a number of circumstances when a creditor can charge off an account but they MAY NOT do so after you’ve filed for Bankruptcy or after you’ve received your BK CD. It’s illegal. No negative remarks or hits after the file date can be added to a credit report. BK laws have changed a lot since 1999.

---

It's enough to drive people crazy trying to first learn the rules and then to try to convince the OC's what the rules are and that they should follow them.  

Most of my accounts showed up as charged off due to BK during the month it was filed.   A few of them showed the account charged off the month it was filed, then showed the account "not rated" the following month, and then once again showed it as "charged off" during the month of discharge.   That ended it for all but one creditor, Capital One Auto.   I actually never was late with them but they had to be included in the BK papers.   I only owed them like $1500 on a car worth about $10K at the time so I made all my payments on time and Cap 1 does not repo if you keep paying, so I paid it off on schedule some six months later.  

But the odd thing is that I filed in August, was discharged in November, and Cap 1 insisted, through many disputes, that the auto loan was charged off the following January.   So it was reporting charged off two months past the BK 7 discharge date.   I fought them over and over with many disputes but they wouldn't and never did budge.   But the truth is that whether it was charged off in August or Novembrer or the following January, it made no difference to my scores.   It did piss me off because I wanted my reports to be crystal clear that following the date I filed, I NEVER had a late payment again, and that was true.   I could have hired a consumer credit lawyer but there just didn't seem any benefit to me at the time.   Today I might go for the jugular vein since I'm way smarter today than I was back then and much less willing to put up with creditors' BS.

[2b2rich]

---

@FireMedic1 wrote:

---

@2b2rich wrote:

In reading the stickie (linked below), I felt there should be more clarification.

Copy of FTC Staff Opinion Letter re: No reporting ...

An account that was discharged in bankruptcy can also be reported as Charged Off also IF it has actually been charged off by the OC.  This includes COs even AFTER discharge, so long as they are actually charged off.  In another letter dated June 3, 1999 (in which the Lovern letter was cited), it was clarified that it is only a violation if the account has not been charged off.

https://www.ftc.gov/legal-library/browse/advisory-opinions/advisory-opinion-mccorkell-06-03-99 

Hopefully this will help some.  I am not even sure how to verify if a Creditor has actually charged off an account after bankruptcy filing, but I also have one showing this and it was never even late much less charged off, at least before filing.  On another note, the 1999 letter does state the risk score assigned to an  IIB tradeline that also carries a charge off, is the same as one that does not include IIB.

(Admin/Mods if you could add this to the sticky in reference it might help those whose account(s) were actually charged off the headache of disputing the charge off).

---

When an account is listed as “Charged Off” on your credit report, that’s a negative. There are a number of circumstances when a creditor can charge off an account but they MAY NOT do so after you’ve filed for Bankruptcy or after you’ve received your BK CD. It’s illegal. No negative remarks or hits after the file date can be added to a credit report. BK laws have changed a lot since 1999.

---

Can you share with me a link that this is illegal?  They're stating that there is no difference in the negativity of one added after BK.

This letter I linked is more recent than the Lovern letter and it clarifies that the Lovern letter only refers to tradelines where the OC did not actually charge the debt off, but reported it that way.  Where would I find the current laws on this, please and thank you?

[2b2rich]

---

@CH-7-Mission-Accomplished wrote:

---

@FireMedic1 wrote:

---

@2b2rich wrote:

In reading the stickie (linked below), I felt there should be more clarification.

Copy of FTC Staff Opinion Letter re: No reporting ...

An account that was discharged in bankruptcy can also be reported as Charged Off also IF it has actually been charged off by the OC.  This includes COs even AFTER discharge, so long as they are actually charged off.  In another letter dated June 3, 1999 (in which the Lovern letter was cited), it was clarified that it is only a violation if the account has not been charged off.

https://www.ftc.gov/legal-library/browse/advisory-opinions/advisory-opinion-mccorkell-06-03-99 

Hopefully this will help some.  I am not even sure how to verify if a Creditor has actually charged off an account after bankruptcy filing, but I also have one showing this and it was never even late much less charged off, at least before filing.  On another note, the 1999 letter does state the risk score assigned to an  IIB tradeline that also carries a charge off, is the same as one that does not include IIB.

(Admin/Mods if you could add this to the sticky in reference it might help those whose account(s) were actually charged off the headache of disputing the charge off).

---

When an account is listed as “Charged Off” on your credit report, that’s a negative. There are a number of circumstances when a creditor can charge off an account but they MAY NOT do so after you’ve filed for Bankruptcy or after you’ve received your BK CD. It’s illegal. No negative remarks or hits after the file date can be added to a credit report. BK laws have changed a lot since 1999.

---

It's enough to drive people crazy trying to first learn the rules and then to try to convince the OC's what the rules are and that they should follow them.  

Most of my accounts showed up as charged off due to BK during the month it was filed.   Fornuately I've only had one show up as a charge off, but I every one of them that was IIB is showing 60 days+ late and none of them were.  I'm 2.5 years post discharge and still fighting some of these!  A few of them showed the account charged off the month it was filed, then showed the account "not rated" the following month, and then once again showed it as "charged off" during the month of discharge.   That ended it for all but one creditor, Capital One Auto.   I actually never was late with them but they had to be included in the BK papers.   I only owed them like $1500 on a car worth about $10K at the time so I made all my payments on time and Cap 1 does not repo if you keep paying, so I paid it off on schedule some six months later.  Really glad to hear you were able to keep your car.  Chrysler required a reaffirmation and I wasn't going to do it so I surrendered the car.  No lates but they completely wiped the tradeline from all 3 bureaus.

But the odd thing is that I filed in August, was discharged in November, and Cap 1 insisted, through many disputes, that the auto loan was charged off the following January.   So it was reporting charged off two months past the BK 7 discharge date.   I fought them over and over with many disputes but they wouldn't and never did budge.  The car you paid off, they reported as charge off?  According to what I was reading in the letter above, that is exactly what the commission stated was a violation back in (1996?)  But the truth is that whether it was charged off in August or Novembrer or the following January, it made no difference to my scores.  The letter clarifies this also, that it does not affect as a negative anymore than the IIB that's already there. It makes me mad too because it seems like they want to do as much damage to our credit as possible because they were burned. It did piss me off because I wanted my reports to be crystal clear that following the date I filed, I NEVER had a late payment again, and that was true.   I could have hired a consumer credit lawyer but there just didn't seem any benefit to me at the time.   Today I might go for the jugular vein since I'm way smarter today than I was back then and much less willing to put up with creditors' BS.

---

I actually have 2 tradelines that never had missed payments etc that I paid and closed back in 2015.  I filed BK7 Oct 2019 and these two accounts are now being reported as IIB.   I'm not sure how to go about getting that removed.  They were positive accounts and now they are not only negative IIB, but they are showing 60+ days late.

[FireMedic1]

"For instance, instead of a delinquent or unpaid debt lingering on your report for years, it will show as being discharged as part of your bankruptcy. In fact, creditors won't be able to report your debt in a variety of ways that could cause your credit to suffer, such as allowing the obligation to show as:

• currently owed or active
• late or delinquent or outstanding
• charged off
• having a balance due, or
• converted to a new type of debt re-aged or given new account numbers, for example)."
• https://www.nolo.com/legal-encyclopedia/can-debts-discharged-bankruptcy-appear-my-credit-report.html 

[2b2rich]

---

@FireMedic1 wrote:

"For instance, instead of a delinquent or unpaid debt lingering on your report for years, it will show as being discharged as part of your bankruptcy. In fact, creditors won't be able to report your debt in a variety of ways that could cause your credit to suffer, such as allowing the obligation to show as:

• currently owed or active
• late or delinquent or outstanding
• charged off
• having a balance due, or
• converted to a new type of debt re-aged or given new account numbers, for example)."
• https://www.nolo.com/legal-encyclopedia/can-debts-discharged-bankruptcy-appear-my-credit-report.html 

---

Many thanks @FireMedic1.   I apologize for my confusion.. I swear HS Trig was easier to grasp than the info out there on this.  I'll draw up a letter tonight and see if I can get mine removed.

[TRC_WA]

---

@FireMedic1 wrote:

---

There are a number of circumstances when a creditor can charge off an account but they MAY NOT do so after you’ve filed for Bankruptcy or after you’ve received your BK CD. It’s illegal. No negative remarks or hits after the file date can be added to a credit report. BK laws have changed a lot since 1999.

---

It's funny you mention that because I just had a collection removed from TU for exactly that.  TU was reporting 2 collections that weren't being reported on EQ and EX.

I took a closer look the other day and while they were both accurate in collections prior to filing and showed IIB... one of them showed a first open date of 2018 which was wrong... I filed in 2017.

Disputed... removed... score went up 5 pts.

[2b2rich]

@FireMedic1 @I filed in oct 2019/discharged Jan 2020.

clearly this was not a pre filing CO with my payment history (zero lates ever).

just to be clear, they can not do this, right?  (Actually several of my IIB accounts that were never late are showing this on experience).

 

[FireMedic1]

---

@2b2rich wrote:

@FireMedic1 @I filed in oct 2019/discharged Jan 2020.

clearly this was not a pre filing CO with my payment history (zero lates ever).

just to be clear, they can not do this, right?  (Actually several of my IIB accounts that were never late are showing this on experience).

 

---

@2b2richYou need to contact your lawyer or go by the office and give them the above copy. Its illegal. The lawyer can advise the creditor they are in violation of BK laws and you can get $1000 per violation and court/attorney costs. The payment status is correct. Worst delinquency is not. Judges dont like the sneaky antics some crditors try to do. Good Luck!