Gorski Law
Pennylvania & New Jersey Consumer Rights Law Firm
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Post-Bankruptcy Errors

The purpose of bankruptcy is to offer the consumer an opportunity for a fresh start free from debt. Although the consumer pays a price for this by having the bankruptcy filing reported on his credit report, the accounts that were included in bankruptcy should no longer be reported as outstanding debts thus reflecting a significantly reduced debt burden for the consumer.  Errors that involve failing to report and account as included in bankruptcy is discussed. Error that involve the appearance of new collection accounts for discharged debts are also discussed.

POST-BANKRUPTCY PROBLEMS WITH CREDIT REPORTS

The purpose of bankruptcy is to offer the consumer an opportunity for a fresh start free from debt. Although the consumer pays a price for this by having the bankruptcy filing reported on his or her credit report, the accounts that were included in bankruptcy should no longer be reported as outstanding debts. The result should thus reflecting a significantly reduce debt burden for the consumer. Accordingly, it is very important that a consumer check his or or her credit report about bankruptcy to make sure the report is accurately reporting the status of all the accounts included in the bankruptcy.

Failing To Report An Account As Included In Bankruptcy

Every account that was included in a bankruptcy should be reports as "included in bankruptcy" with an outstanding balance of zero. If the account is not reported this way, the account may be adversely affecting your score because the account is misinterpreted as a current outstanding debt as opposed to a debt you no longer owe.

New Collection Accounts Appearing For Discharged Debts

Once a debt is discharged in bankruptcy, you are no longer responsible for the debt and collectors cannot engage in collection activity against you for that debt. This includes reporting a discharged debt as a new account to the credit reporting agencies. Sometimes a discharged debt will be resold to a new creditor or collector without disclosing that the debt is in fact discharged and uncollectible.  The result is that the a new account ends up appearing on your credit report for the discharged debt which will harm your credit score since it will appear as a current unpaid debt.

Post-Bankruptcy Reporting Errors Are A Serious Problem You Should Not Ignore

If your credit report has post-bankruptcy reporting errors like those described above, you should not ignore this problem. Minimally, you need to contact the credit reporting agency to dispute the erroneous items on the report. You also may want to consider speaking to a lawyer.  Post-bankruptcy reporting errors can cause numerous harms including:

  • Denials of credit including mortgages, auto loans and credit cards;
     
  • Delays or denial of your employment application if your credit is checked;
     
  • Denied an apartment or other rental property;
     
  • Denied utility services such a cable tv or a cell phone;
     
  • Denied insurance.

In addition to these harms, post-bankruptcy errors on on your credit report can adversely impact your reputation and cause substantial emotional stress.  All of these harms are compensable under the law, but you are unlikely to receive any compensation without help from a lawyer. 

Do You Need Help?

If you think you post-bankruptcy errors on your credit report, Gorski Law may be able to help resolve the problem and obtain compensation for you.  Initial consultations are always free. Call 215-330-2100 or email the firm to schedule a consultation.