Bankruptcy Protection and What to Do When Creditors Ignore It - Westgate Law

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Bankruptcy Protection and What to Do When Creditors Ignore It

Sometimes creditors seem to completely ignore bankruptcy protection. For petitioners it can be extremely frustrating as one of the main benefits of filing for bankruptcy is to obtain relief from creditors seeking payment that isn’t available. When creditors ignore the protection provided by bankruptcy, there is action you can take.

For instance, creditors are required to report accounts as “Discharged in Bankruptcy.” If a creditor makes a negative report after they have been notified that you are filing for bankruptcy, you can follow the following steps in order to obtain a correction.

Step 1: Challenge the Negative Notation Directly: Contact the credit bureaus with evidence that you filed for bankruptcy and that the account was listed in the schedule of creditors.

Step 2: Make sure you are able to show proof that the bankruptcy case was completed and a discharge was received.

It’s possible that a creditor or collection agency will report that you will not be receiving a discharge while your case is still active, but in most cases, reporting the account prior to the discharge or completion of the case isn’t appropriate. Having said that, consumers in the midst of bankruptcy often have to deal with inaccurate reporting from creditors. It’s extremely important to keep an eye on your credit report during bankruptcy and even more important post-bankruptcy.

While collection agencies and creditors receive notification of your bankruptcy, they actually have very little incentive to report the bankruptcy accurately to the credit bureaus. The process is simple. The collection agency or creditor just needs to code your account properly indicating “Discharge in Bankruptcy.” But many representatives/employees do not follow through.

Some bankruptcy filers have success with credit repair companies that work to correct inaccurate information, but the process can be completed without professional help. Simply review your credit report 6-12 months after the closing of your bankruptcy case. Proactively view the listed accounts and check to make sure that creditors are reporting the accounts as discharged. Then challenge any inaccurate information showing up on the report direction with each credit-reporting agency according to their designated rules/process.

If you need additional help filing for a bankruptcy discharge or with getting creditors to stop harassing you for a payment that you don’t have, contact the southern California bankruptcy attorneys at Westgate Law.

About the Author

Justin Harelik

Justin has a singular goal: to get people out of financial distress and move them to financial stability and prosperity. He does this by combining 15 years of in-depth experience in bankruptcy, credit management, debt negotiation and student loan modifications, and he does it with both English and Spanish-speaking clients.

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