MORTGAGE COMPANY ABUSES

SURRENDERED HOMES OR OTHER REAL ESTATE

If you surrendered your home or other real estate in bankruptcy, it may be that your legal rights have been violated. Once the mortgage debt has been discharged you shouldn't be getting statements, collection letters, insurance notifications or telephone calls concerning your old mortgage. Any contact after the debt is discharged is likely to be a violation of the discharge injunction or other state or federal law. Don't ignore these violations as they will seriously impact your credit score and ability to get a home loan in the future.

ILLEGAL ACCESS TO CREDIT REPORTS

Mortgage companies or their servicers frequently continue to access a consumer’s reports long after the mortgage debt has been discharged. This violates the bankruptcy discharge and the Fair Credit Reporting Act. If this has happened to you, you may be entitled to statutory damages of up to $1,000 per pull if the act was intentional.  You should have a professional review your credit reports to make sure this hasn't happened to you.

PROSECUTION OF YOUR CLAIMS

You will need experienced litigators since these type cases are filed in federal court. You should be able to find an attorney to represent you on these matters on a contingent fee basis. When they review your credit reports they will be looking, not only discharge violations, but also for violations of the Fair Credit Reporting Act as well as other state and federal statutes that have been enacted to protect your rights as a consumer. These claims can be quite lucrative but to prevail you must have convincing evidence. If you think you might have a claim it is imperative that you read Don't Throw Away the Evidence now. Without evidence you won’t have a viable claim.

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How To Improve Your Credit Score After Bankrutcy-Part 5

Applying for New Credit to Improve Your Credit Score

a. If you have an auto or home loan that you have reaffirmed you won’t need to apply for a credit card to reestablish your credit. Just paying these bills on time is all you need to worry about.

b. If you are still paying on a car or home loan but didn’t reaffirm the debt the creditor may not be reporting to the credit bureaus so your credit won’t bounce back the way it should. Sometimes you can get these creditors to begin reporting again but you will have to contact their bankruptcy department and ask them to start reporting. They will probably need you to sign a waiver since reporting a discharge debt would be a discharge violation. Because of this some creditors will still refuse to report current house or car payments to the bureaus even if you offer to give them a waiver. But it won’t hurt to try. 

c. If you have no open credit accounts that are reporting to the bureaus after you get your discharge, you may want to apply for an auto loan or credit card so you can start building your credit again. If you do, follow these rules:

i. First you need to do a family budget to see if you can afford a credit card.

(1) write down your family net income (after taxes and deductions)

(2) make a list of all your expenses each month including the cash you spend. Be realistic. Then add it up and subtract it from your income.

(3) If you have a surplus, then you can apply for a credit card or auto loan as long as the minimum payments are less than the surplus amount.

(4) If you have more expenses than income, don’t get any new credit or auto loan. You can’t afford it.

ii. Only get a new credit card or auto loan if you can easily make the minimum payments each month. If you miss payments your credit score will go down instead of up.

iii. Put the card on automatic pay from your checking account for the minimum payment due each month.

iv. When the paper credit card bill comes in, pay as much more as you can by check.

v. Don’t ever max out your credit card.

vi. Borrow less than one half of your credit limit, if possible.

vii. Try to pay the full balance when the bill comes at least once or twice a year.

viii. Only use the credit card for emergencies or to cover short term shortfalls.

ix. Don’t ever apply for a new credit card so you can use it to make payments on another credit card. 

x. Avoid adding family members as authorized users of a credit card as that makes it much more difficult to manage properly.

          For more information you can visit our website, see us on Facebook or follow me on Twitter.

    

How to Improve Your Credit Score After Bankruptcy-Part 4

Post-Bankruptcy Debt

Debts incurred after you file your case are not discharged. 

1. Debts incurred after your bankruptcy filing are not usually discharged so pay them timely.
2. Don't Ignore small debts. Even small unpaid balances that are in collection or charged off can drastically hurt your credit. Don’t ignore them or think they will go away. 
3. Pay off small balances in full that have accrued since your filing
4. Negotiate with creditors on debts too large to pay off. Try to get them to take 25%-50%. If they won’t agree to that, try to get an agreed payout of a flat amount per month like $50-$100. 
5. If you reach a negotiated settlement make sure it is put in writing and it is agreed that the creditor will delete the reporting once the agreed settlement is paid, or reported as “Paid As Agreed” or “Negotiated Settlement” with a balance of -0-.
6. Student loans and taxes often are not discharged and must be addressed. Consolidate student loans or get them deferred. Once you do that make sure the creditors involved remove and adverse reporting. If they won't, then dispute it.
7. Work out an installment agreement with IRS if you can’t pay the full amount immediately. That can usually be done with a telephone call or a meeting at your local IRS office. Don't let them file a federal tax lien. That will do great damage to your credit. If one is filed, get it released once the agreement is in effect.
8. If the amount of taxes is so high you could never pay it, try an offer in compromise. You’ll probably need a lawyer of accountant to help you with this, but if you qualify you could save a lot of money and avoid having a federal tax lien messing up your credit.
9. Child support won’t be discharged so keep it current and work out a payout on past due sums if they weren’t dealt with in your bankruptcy. Past due child support really looks bad on a credit report, so get it paid off as soon as possible.

                  For more information you can visit our website, see us on Facebook or follow me on Twitter.

How To Improve Your Credit Score After Bankruptcy-Part 1

Review Your Reports Annually

This may seem obvious but most consumers don’t look at their credit reports until they are declined for credit or are alerted by a third party of a problem. Be proactive. Go to http://annualcreditreport.com each year and get your FREE copy of your credit reports from Experian, Equifax and TransUnion. Be sure and download them in PDF format so you can save them on your computer and, if you live in Texas and want us to review them for you, forward them to us by email. Having them in electronic format is much easier than printing them out and mailing or faxing them to us. Once we get them we will store them on our server for later use if need be. If you lose your copies we will still have copies we can send you. And remember, your credit review is always free at Manchee & Manchee, P.C.

              For more information you can visit our website, see us on Facebook or follow me on Twitter.

How to Improve Your Credit Score After Bankruptcy-Part 3

Dispute All Reporting Errors Discovered

 It does no good to review your credit reports if you don’t dispute the errors you find.

1. Unsecured debts that were included in your bankruptcy should be reported as “included in bankruptcy,” “Chapter 7 or 13 Bankruptcy” or “Wage Earner Plan.” If the bankruptcy isn’t mentioned you should dispute the account.
2. Debts included in your bankruptcy that were discharged should have a -0- balance. If they show a balance owing then the account should be disputed.
3. Debts included and discharged in your bankruptcy should have no other derogatory statements in the “Status” line other than the bankruptcy notation. If the status line includes things like “collection account,” “past due,” or “Charge off” it should be disputed. You should argue that it can't be a collection account because the creditor can't try to collect it, it can't be past due because nothing is owed, and it can't be a charge off unless it was was reported as a charge off before the bankruptcy was filed. If it is reported as a charge off after the bankruptcy is filed, it would be a stay violation.
4. If you have forgotten to list a creditor in your bankruptcy you should immediately send them a copy of your discharge by certified mail. There is case law in some jurisdictions that says in a Chapter 7 no asset case the unlisted unsecured debt is still discharged. So, give the creditor 60 days after you send it a copy of the discharge and if the reporting is not corrected, dispute it. If the creditor doesn’t respond within 30 days the reporting will be removed. If the creditor responds and confirms the reporting then you should consult a consumer attorney to help you get it removed.
5. Debts you have incurred since the bankruptcy was filed won’t be discharged, but you can still dispute them if they are reported incorrectly. If you don’t recognize the account as your account, the amount is incorrect, or there is something else wrong with the way it is being reported you should dispute it.
6. If you are in Chapter 13 each credit line included in the bankruptcy should show a status of “Chapter 13" or “Wage Earner Plan” with the current balance due on the debt after any payments made by the Chapter 13 Trustee. When you file chapter 13 and a plan is confirmed all defaults on your debts are cured so there should be no other negative remarks in the status line such as “Collection Account,” Past Due” or “Charge off.” If there are dispute them.
7. In Chapter 13 cases review your credit reports again 3-6 months after your discharge to make sure the discharge is reported correctly

For more information visit us on our website or on Facebook or follow me on Twitter. 

How To Improve Your Credit Score After Bankruptcy-Part 2

Review Your Reports Carefully 

1. Don’t just glance at the reports and look only for the obvious errors.
2. Check the names they have listed for you and make sure they are all correct. If a name listed was never used by you, dispute the listing.
3. Also, look at the addresses they claim you have lived at. If you didn’t live at any of the addresses listed, dispute that item.
4. Check each credit line and the creditor that claims your have an account with them. If you don’t have an account with them, dispute that listing. 
5. When you check a credit line make sure the amount is in the ballpark. It will never be exact, but if it is way off, dispute it.
6. Look for negative comments like “charge off,” “collection account” or “Past Due.” If this notation is not correct you should dispute it.
7. Look at your regular inquiries (hard pulls) and make sure you have applied for credit with each of these creditors. If you haven’t it may be illegal.
8. Look at the account reviews (soft pulls) on TransUnion and Equifax. You won’t be able to find them on Experian as them lump them in with promotional pulls. If you don’t have an account with a creditor who has done an account review it may be illegal.

For links where you can dispute inaccurate reporting or for more information you can visit our website, see us on Facebook or follow me on Twitter.

Creditors Confused by Chapter 13 and Consumers Suffer

Creditors have a difficult time properly reporting a chapter 7 bankruptcy to the credit bureaus. Whether it’s anger or resentment over having to write off the debt, ignorance or incompetence is anybody’s guess. The proper reporting of a discharged debt is to report the account as “closed,” the balance at “zero” and some mention of the bankruptcy. Sometimes it is shown as “included in bankruptcy” or “chapter 7 bankruptcy.” Rarely do creditors state that the debt has been “discharged in bankruptcy” even though that would be the most accurate way to report it. The fact is creditors are vindictive and if there is anyway to legally hurt a consumer coming out of bankruptcy, they’ll do it. So, it is important for consumers to review their credit reports three or four months after discharge to be sure the chapter 7 debt has been properly reported.

It is even worse with a Chapter 13. A lot of creditors don’t understand how a chapter 13 works and they tend to either treat it like a Chapter 7 or they just freeze the account and quit reporting it because they know they will eventually be paid all or a portion of their debt. The proper way to report the debt is to show the account as “Open,”state that it is included in a “Chapter 13 bankruptcy and report any changes that occur if payments are made by the Chapter 13 Trustee. But, rarely do creditors properly report a chapter 13 bankruptcy to a credit bureau and when the discharge order is finally signed three to five years later, its often ignored.

There is a lot of chapter 13 debt that is sold to debt buyers and by the time the debt is discharged it may have changed hands several times and the odds of the holder of the debt getting notice of the discharge is slim. So, long after the bankruptcy was filed it is common for consumers to suddenly get phone calls and letters trying to collect a discharged debt. Or, the consumer will have credit denied and discover it was because debts that were discharged in bankruptcy have suddenly appeared on his credit report.

Our firm offers a free discharge compliance review including an examination of your credit reports. For more information check out our website at http://mancheelawfirm.com/. You have nothing to lose but your bad credit.

Creditors Often Fail to Pass on Bankruptcy Notices to Collection Agencies

Today I'm working on a petition against a Colorado collection agency that called our client six times afrer receiving the account from the orignal creditor who was listed in their chapter 13 bankruptcy. This is a blatant violation of the automatic stay and/or discharge injjunction. In this instance the case was later converted to chapter 7 so it was a discharge violation. Then, to make matters worse, the collection agency assigns the case to an attorney for collection, yet another violation.

How does something like this happen? Is it intentional or simply negligence? The excuse we almost always get from collection agencies is that they had no knowledge of the bankruptcy because the creditor who sold or assigned the account didn't tell them about it. Unfortunately for the collection agencies, ignorance of the bankruptcy is no excuse. When they try to collect a debt that is no longer collectable they violate the Texas Unfair Debt Collection Act and if they report it to a credit bureau they can be guilty of liable as well. It is irrelevant whether they knew about the bankruptcy or not.

What is fairly clear is that when the original creditor gets the conversion and discharge notices it will not pass on those notices to the current holder of the debt. I think this is a matter of logistics. The original creditors simply have too many accounts that have been assigned for collection or sold and have no mechanism in place to forward notices from the bankruptcy court.

So, the consumer loses and has to suffer through the mental anguish that always results from taking nasty phone calls and/or receiving collection letters from attorneys long after the debt is discharged. Lucky there is a remedy to the consumer.