Consumers Who Filed for Bankruptcy Get Help with Old Debts on their Credit Reports

A recent court order in a class action will help millions of consumers who filed bankruptcy but have been plagued with old debts showing up on their credit reports. The old debts, which are typically forgiven by the courts in a bankruptcy filing, are still being reported as active on many consumers’ credit reports. As reported in the Wall Street Journal, Experian and TransUnion say they have already updated their credit files to be compliant with the court order. TransUnion also sent notices to some customers saying they “may experience a slight change” to their credit scores if any of...

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Lenders Charge Homeowners Questionable Servicing Fees to Add to Bankruptcy Burden

Loan servicers tack on all kinds of bogus fees and charges to consumers going through Chapter 13 bankruptcy and whose homes are being foreclosed upon, according to an article in today’s New York Times. Bankruptcy specialists say lenders and loan servicers often do not comply with even the most basic legal requirements, like correctly computing the amount a borrower owes on a foreclosed loan or providing proof of holding the mortgage note in question. The article suggests that when housing sales are down and the loan originating side of the lender is originating fewer mortgages, the loan servicing side makes...

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Debt Buyers Continue to Relentlessly–and Illegally–Pursue Consumer Debt Discharged in Bankruptcy

This post linked to BusinessWeek’s fine article about consumers who file bankruptcy under Chapter 7 and are supposed to have their debts erased. Many post-bankruptcy consumers were finding that debt collectors were continuing to pursue them for debts already discharged in bankruptcy. BusinessWeek’s article said the driving force behind this phenomenon is a vibrant market in which certain debt buyers avidly buy and sell debts that should have been extinguished. I just received a telephone call from one of these debt buyer’s New York lawyers. This person disputed the accuracy of a quote in the article from a lawyer for...

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