 Post-bankruptcy
credit report cleanup
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 Dear
Bankruptcy Adviser,
I filed for Chapter 7 bankruptcy nearly two years ago. Recently
I ran a credit report and noticed several of the creditors included
in the Chapter 7 are still listed as active, derogatory, etc., accounts.
It was my understanding from the attorney who filed my bankruptcy
that all creditors would be removed and that would be reflected
in the credit report. Can you please clarify?
-- Geno
 Dear
Geno,
You are dealing with one of the most frustrating post-bankruptcy
issues. Simply, there is a difference between your creditors and
the credit bureaus. A successful petition for bankruptcy erases
your debts with the creditors but does not erase the record of the
debts held by the credit bureaus.
There's an expensive option and a cheap option. Let's
start with the cheap one.
First, assemble the following materials: driver's license, Social
Security card, and Schedule F (the schedule of debts from your bankruptcy
petition which lists the name, account number and address of the
creditors). Then, make three copies of this packet -- one for each
of the three major credit bureaus.
Then, go through their dispute resolution process.
Each of the bureaus offers dispute resolution online, by telephone
and via mail. I recommend you conduct the dispute by mail so you
get everything in writing. Send a copy to the appropriate address,
with a request (on their form if they provide one) explaining that
each creditor listed as active or derogatory was included in your
petition and should therefore be removed from your credit report.
You can get more information on the dispute process
on the Web sites of the credit bureaus, Equifax,
Experian
and TransUnion.
The Federal Trade Commission offers good advice,
and Bankrate provides a sample credit report error form
letter you can use.
It is important to note that even if you inadvertently
omitted a creditor from your list of debts, that debt is still discharged.
Under Beezley v. California Land Title (994 F.2d 1433), which is
a 9th Circuit U.S. Court of Appeals case, a bankruptcy discharge,
under Chapter 7, discharges all debts that arose before the filing
of the bankruptcy, whether or not the debt was listed in the schedule
of debts. While this case was from the 9th circuit, which covers
California, Alaska, Arizona, Washington, Nevada, Montana and Oregon,
most circuits have similar cases. If this is your situation, you
do not need to reopen your case to include that new debt. However,
the creditor must be notified, so send your packet to the credit
bureaus and any creditors who were (mistakenly) not included on
your Chapter 7 petition.
Finally, you'll need to keep on top of the credit bureaus to make
sure they follow through and remove the objectionable items.
Now, the expensive option: Hire an attorney to do everything above.
Obviously, Geno, you see where I come down on this one. While it's
almost always to your benefit to have an attorney on your side,
this particular situation is totally doable on your own. It will
take time to get your dispute processed by the credit bureaus, but
you're in the right and the law is on your side. Be patient, file
your paperwork, and get on with your life. The credit bureaus will
catch up to your reality soon enough.
Justin Harelik is a practicing bankruptcy lawyer
in the Los Angeles office of Price Law Group. To ask a question
of the Bankruptcy Adviser go to the "Ask
the Experts" page, and select "bankruptcy" as
the topic.
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