What to do if you see discharged debts on your credit report

Have you checked your credit report recently? You may be surprised to find discharged debts still listed on your report. Discharged debts are those that you are no longer responsible for because you went through the bankruptcy process.

Here’s what you can do if this happens to you. Often, these will show up on your credit report long after the debt has been discharged, and can negatively impact your credit score.

The fair credit reporting act makes sure you get an accurate credit report after the debt has been discharged.

If you see discharged debts on your credit report, don’t panic! There are steps you can take to remove them. The foundation of credit reporting law is that you’re entitled to an accurate credit report. This means that any information on your credit report must be accurate and up-to-date.

If you have to sue to get yours fixed, the law makes the credit reporting agency pay your attorney’s fees. So don’t hesitate to take legal action if you find discharged debts on your credit report. Our attorneys are more than happy to help you get this done.

The first step is to fill out the form below:

Most Common Post-Bankruptcy Discharge Errors

First, do you need a free copy of your credit report? You can go to annualcreditreport.com and get your free credit report. Or you can call the credit reporting companies and buy a report from them, you do not have to pay for the score.

Remember the bankruptcy code offers you a fresh start and that includes your credit reporting agencies listing your discharged debts as discharged debt.

Discharged Debts not Labeled as Discharged in Bankruptcy and not listing a Balance Due of $0.00.

Every debt that was discharged in your bankruptcy, which should be pretty much everything except for debts you “reaffirmed” and typically student loans.

All discharged debts need to be noted on your credit report as “Discharged in Bankruptcy” (or words to that effect), have a Balance Due of $0.

The entire point of having your debts discharged is to have that zero balance.

If or when this doesn’t happen – you’re going to be surprised. You are going to wonder about your fresh start and what happened.

You’re going to think it’s you – that maybe you did not understand how bankruptcy worked. You are right – creditors get this wrong all the time.

Repeated “Hard Pull” Credit Inquiries by Your Former Creditor.

Once your debt is discharged in bankruptcy, your relationship with the bank and whoever else is over! You are finished and they should remove all derogatory items from your credit report.

They have no right to pull your credit every month and bring down your score. But they do.

They just forget to stop. Look for this error by checking your “Hard Inquiries” and looking for your discharged creditors pulling your credit score after your bankruptcy discharge.

Charge-offs Reported After the Filing of Bankruptcy or After the Bankruptcy Discharge

When an account is listed as “Charged Off” on your credit report, that’s 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 bankruptcy discharge.

Remember they are supposed to remove all derogatory items from your credit.

Formerly Secured Creditors Still Reporting that You Owe Them Money

This is particularly common following Chapter 13 bankruptcy. If you had a car that you surrendered to the bank and you were upside down on it. Let’s say it was worth $20K and you owed 35K.

That $15K is now unsecured debt and it gets paid (or not) in accordance with the Chapter 13 plan. When your Chapter 13 is completed and you receive your discharge, then you do NOT owe that money.

However, those creditors will often report to the credit bureaus that you do.

Spouse is Reported as Having Filed for Bankruptcy When They Did Not

If one spouse files for bankruptcy and the other doesn’t, it’s okay that their joint debts are listed as “included in Bankruptcy” on the non-filing spouse’s credit report.

What is NOT okay, is reporting that the non-filing spouse actually filed for Bankruptcy. This will turn up in the “Public Records” section of the non-filing spouse and/or in the non-filing spouse’s separate accounts being listed as “included in bankruptcy.”

Reaffirmed Accounts Misreported

Reaffirmation happens when you could discharge an account in bankruptcy. Most of the time it is when you reaffirm a car in Chapter 7.

You want to keep the car, so the bank has you sign a reaffirmation agreement stating that you are keeping the car and you have to pay the debt.

These accounts should be listed as “Reaffirmed” and NOT as discharged in bankruptcy.

So, what to do next?

You’ve gotten your reports and checked them (good job!) and you’ve found one or more of them (kind of a bummer). No worries, fill out the form above and we can help you!