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Expanding Buttocks
October 1, 2008 4:35 AM
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Can someone please define \"forgiven\" for me? For example, if I settled a debt years ago, but its stayed on my report... it will go away now?

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Expanding Buttocks
October 1, 2008 4:39 AM
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@Expanding Buttocks:

Oops, didn't read that it was for bankruptcy. My bad!

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twophrasebark
October 1, 2008 4:40 AM
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They will not meet that deadline.

Without question. No way. They are in big trouble.

Here's the problem: They have designed their systems to be completely imbecilic. You have a bankruptcy? Great, we'll note that. Big Bank 123 says you still owe the money that was discharged in your bankruptcy? Great, we'll report that too!

This was not an error in design. They lobbied and got legislative protection to basically do nothing but throw data at the wall so to speak and call it a credit report.

That judge is going to be very angry.

And Equifax, which is the absolute worst, is going to have the greatest trouble of all.

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DamonHiggins
October 1, 2008 4:51 AM
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Remember it is up to you to follow up and notify them of any discrepancies on your credit report. No one takes better care of your business than you! don't rely on the credit reporting companies for justice. They employ a bunch of minimum wage employees from an outsourced country who are lucky they can speak English much less make sense of a credit report.

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ClickClickThud
October 1, 2008 6:09 AM
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Since this quaint notion of \"credit\" is dying in a fire as we speak, do CRAs really matter anymore?

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kc2idf
October 1, 2008 10:17 AM
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Is that October 1st as in today, or next year, or some other future year? Anyone know?

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PriceIsWrong
October 1, 2008 11:56 AM
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@kc2idf: I really hope it's this year, as my bankruptcy info is supposed to come off right about now, and I would like to buy a house sooner rather than later, though that's going to be a pain now too...

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Verucalise (Est.February2008)
October 1, 2008 12:45 PM
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Yeah, OK. I can't even get the credit bureaus to remove inaccurate info, who the hell thinks this will ever happen? I mean,, I'm all for it, but the chances are slim.

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chrisjames
October 1, 2008 12:47 PM
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But the bankruptcy filing still shows on the credit reports, right? I gather that it was an issue of the bankruptcy and the debt both appearing at the same time, but I want to clarify that.

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thebluepill
October 1, 2008 1:12 PM
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Both the Bankruptcy AND Debt DO show on your report.


The Reporting Agencies will leave the debt on there and simply put a note in the Status like \"Chapter 7 / Charged Off\" or \"Chapter 7 / Paid but never late\". But the bad mark stays on there.


Now.. Does this mean the agencies will have to remove those entries or leave them on with a different Status?

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TracyHamandEggs
October 1, 2008 1:39 PM
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I believe (and I can be wrong here) that they would be reported as \"ZERO BALANCE\" accounts. The problem now is they still show the full amount at the time of discharge. This causes a hit to the credit score because it kills the ratios they use come up with it.

Also affects when lenders calculate things like Debt to Income ratios.

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KelseyHaermm
October 1, 2008 1:30 PM
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This article needs more explanation. As its written right now it sounds like the judge has changed federal law (the FCRA). Since a bankruptcy would show as a public record on your credit report and not a trade line typically people who have filed BK have both BK trades and Bankruptcy in their public records section. It is not the CRA's responsibility to update lender's tradelines for them- the lenders need to report accurate information- end of story. Why is it that the CRA's are always at fault when lenders don't report in accurate info (how is the CRA supposed to know)? I say hold lenders at fault when they are too busy collecting your money to report in accurate information.

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twophrasebark
October 1, 2008 2:10 PM
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I don't think they were marking the debts as discharged. So for example:

Joe Consumer Credit Report

Bankruptcy 1/1/08

Sears Credit card 1/1/07 Joe still owes us!!

-------

The Sears credit card should be marked discharged no matter what Sears says.

This is the incredible amazing mind boggling insanity of what we allow the credit agencies to do. Or did, until the judge's ruling. In the face of contradictory data and impossible data, the credit agencies just report it anyway.

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Wit
October 1, 2008 3:21 PM
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Sadly, not quite as exciting as it sounded in the WSJ. The case appears to be White, et al. v. Experian Information Systems, Inc. No. 05-CV-1070 DOC (C.D. Cal.)

It's an order approving a settlement, so there's still really nothing on the books saying that the reporting of discharged debts is a bad/illegal thing.

That said, the CRAs did agree to the settlement, and it seems to be across the board.

I did just a quick skim of the order, but the two things that stuck out to me is that the CRAs made some noises about the assumptions leading to the inaccurate reporting of accounts that were deliberately not included in the bankruptcy as closed, and also that the CRAs have a grace period to fix any inaccuracies reported to them. I also didn't see any sort of \"or else\" or penalty provision, but as I said, I skimmed.

The WSJ's \"zombie debt\" illustration is fantastic, though ;)

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SuvarnarekhaLazork
October 1, 2008 6:33 PM
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I filed for bankruptcy and it took me nearly 6 months to have my credit report looking decent. I would get hit with a 30 days late/60 days late, etc. every month next to debts that were labeled as Chapter 7/bankruptcy. I had to fax, email, and snail mail letters in each month with my paperwork and letters from my lawyer stating what they were doing was illegal.

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P41
October 2, 2008 3:47 AM
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Shocking. Next thing those nosy judges will say is that collectors aren't allowed to harass people to pay off those debts that were discharged in bankruptcy.

Aiding zombie debt collection is so obviously illegal there should be no excuse for needing more time. Judge would be perfectly justified in not extending the deadline and simply saying ok no more credit reports until it's fixed then.

SuvarnarekhaLazork: I bet they never reimbursed you for those expenses, did they?

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