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NY Times Article - Pending Litigation Re: Major Players reporting "Charge-off" Status post BK

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This may provide some ammo to fight charge-off status still reporting on discharged debt.

I just saw where one of my discharged debts had been sold after my BK 7. Couldn't figure out why. This is probably the reason.

 

http://dealbook.nytimes.com/2014/11/12/debts-canceled-by-bankruptcy-still-mar-consumer-credit-scores/?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news

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Well Experian is ignoring that. It says all notations of late pays and charge offs needs to be taken off. I tried copy and paste but the website won't let me.

 

I have about 6 tradelines showing late payment history and charge offs that I have disputed numerous times. Maybe time for a CFPB complaint.

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This may provide some ammo to fight charge-off status still reporting on discharged debt.

I just saw where one of my discharged debts had been sold after my BK 7. Couldn't figure out why. This is probably the reason.

 

http://dealbook.nytimes.com/2014/11/12/debts-canceled-by-bankruptcy-still-mar-consumer-credit-scores/?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news

 

Interesting. So debts discharged in bk still have some monetary value? What craziness is that?

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This may provide some ammo to fight charge-off status still reporting on discharged debt.

I just saw where one of my discharged debts had been sold after my BK 7. Couldn't figure out why. This is probably the reason.

 

http://dealbook.nytimes.com/2014/11/12/debts-canceled-by-bankruptcy-still-mar-consumer-credit-scores/?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news

 

Interesting. So debts discharged in bk still have some monetary value? What craziness is that?

 

Brought to you by our kind lending friends who brought us the great mortgage meltdown. They will try ANYTHING to make a buck. Their view is just do it and if we get in trouble later we will apologize.

Edited by BJKill

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I have Synchrony Bank accounts reporting as iib but have co as the status in the payment history(only on Experian)....ironic that they report is as Charge Off the same month I filed(keep in mind I filed on 3/3)...

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This may provide some ammo to fight charge-off status still reporting on discharged debt.

I just saw where one of my discharged debts had been sold after my BK 7. Couldn't figure out why. This is probably the reason.

 

http://dealbook.nytimes.com/2014/11/12/debts-canceled-by-bankruptcy-still-mar-consumer-credit-scores/?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news

 

Interesting. So debts discharged in bk still have some monetary value? What craziness is that?

 

Brought to you buy our kind lending friends who brought us the great mortgage meltdown. They will try ANYTHING to make a buck. Their view is just do it and if we get in trouble later we will apologize.

 

 

+10,000.

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This may provide some ammo to fight charge-off status still reporting on discharged debt.

I just saw where one of my discharged debts had been sold after my BK 7. Couldn't figure out why. This is probably the reason.

 

http://dealbook.nytimes.com/2014/11/12/debts-canceled-by-bankruptcy-still-mar-consumer-credit-scores/?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news

 

Interesting. So debts discharged in bk still have some monetary value? What craziness is that?

 

Brought to you buy our kind lending friends who brought us the great mortgage meltdown. They will try ANYTHING to make a buck. Their view is just do it and if we get in trouble later we will apologize.

 

 

There is a difference between debts discharged in BK, debts outside of SOL, and stale debts that are legally collectable but unlikely to be paid. Contracts to sell the former two, and especially the ones IIB, seem beyond the pale to me.

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I don't have the patience or interest to read the article a second time, but upon first reading there are two places that reference the sale of accounts before the bankruptcy has been discharged. I've added emphasis.

 

Seems like the sequence of events: Bank sells distressed debt, borrower files bankruptcy, bankruptcy is discharged, bank no longer owns the debt that is discharged.

 

For the debt buyers and the banks, the people briefed on the investigations said, it is a mutually beneficial arrangement: The banks typically send along any payments that they receive from borrowers to the debt buyers, which in turn, are more willing to buy portfolios of soured debts — including many that will wind up voided in bankruptcy — from the banks.

 

Those contracts shed light on the shadowy market of soured debts, including tens of billions of dollars that were voided in bankruptcy. Some banks sell off long overdue bills, which eventually wind up being extinguished in bankruptcy after the sale, for steeply discounted prices to debt buyers.

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I have Synchrony Bank accounts reporting as iib but have co as the status in the payment history(only on Experian)....ironic that they report is as Charge Off the same month I filed(keep in mind I filed on 3/3)...

 

 

Sunoco/Citibank is doing the same thing to me, only on EX, and for the grand sum of $21!

 

The DOFD was in 2008, and they're trying to claim it was just charged off last August.

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I don't have the patience or interest to read the article a second time, but upon first reading there are two places that reference the sale of accounts before the bankruptcy has been discharged. I've added emphasis.

 

Seems like the sequence of events: Bank sells distressed debt, borrower files bankruptcy, bankruptcy is discharged, bank no longer owns the debt that is discharged.

 

For the debt buyers and the banks, the people briefed on the investigations said, it is a mutually beneficial arrangement: The banks typically send along any payments that they receive from borrowers to the debt buyers, which in turn, are more willing to buy portfolios of soured debts — including many that will wind up voided in bankruptcy — from the banks.

 

Those contracts shed light on the shadowy market of soured debts, including tens of billions of dollars that were voided in bankruptcy. Some banks sell off long overdue bills, which eventually wind up being extinguished in bankruptcy after the sale, for steeply discounted prices to debt buyers.

It is a bit of a hard read, but there is nothing wrong with selling bad debt to junk buyers as long as the debt is valid (pre-BK filing). What the article is saying is that the lenders are not updating the status of the loans to reflect that the debt was IIB, which renders it uncollectible. The deceit comes in not updating the status of the OC debt which renders the debt not valid for new buyers too.

 

"Judge Robert D. Drain of the federal bankruptcy court in White Plains said in one opinion that debt buyers know that a bank “will refuse to correct the credit report to reflect the obligor’s bankruptcy discharge, which means that the debtor will feel significant added pressure to obtain a ‘clean’ report by paying the debt,” according to court documents."

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I don't have the patience or interest to read the article a second time, but upon first reading there are two places that reference the sale of accounts before the bankruptcy has been discharged. I've added emphasis.

 

Seems like the sequence of events: Bank sells distressed debt, borrower files bankruptcy, bankruptcy is discharged, bank no longer owns the debt that is discharged.

 

For the debt buyers and the banks, the people briefed on the investigations said, it is a mutually beneficial arrangement: The banks typically send along any payments that they receive from borrowers to the debt buyers, which in turn, are more willing to buy portfolios of soured debts — including many that will wind up voided in bankruptcy — from the banks.

 

Those contracts shed light on the shadowy market of soured debts, including tens of billions of dollars that were voided in bankruptcy. Some banks sell off long overdue bills, which eventually wind up being extinguished in bankruptcy after the sale, for steeply discounted prices to debt buyers.

It is a bit of a hard read, but there is nothing wrong with selling bad debt to junk buyers as long as the debt is valid (pre-BK filing). What the article is saying is that the lenders are not updating the status of the loans to reflect that the debt was IIB, which renders it uncollectible. The deceit comes in not updating the status of the OC debt which renders the debt not valid for new buyers too.

 

"Judge Robert D. Drain of the federal bankruptcy court in White Plains said in one opinion that debt buyers know that a bank “will refuse to correct the credit report to reflect the obligor’s bankruptcy discharge, which means that the debtor will feel significant added pressure to obtain a ‘clean’ report by paying the debt,” according to court documents."

 

 

Right, my point is that they aren't updating the status of an asset that they no longer own, because they no longer own it. The credit report should reflect the final status of the asset.

 

It's a pretty big stretch to me to suggest that the OC retains an obligation to update the status of something they haven't owned for weeks, months or years.

 

If they've sold the debt, though, it should be reporting with a zero balance, and that would be the basis for disputing the TL.

Edited by cv91915

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The problem is when the banks charge off an account, sell it, and don't zero the balance. OTOH, if the banks place the collection accounts and still have an equity interest in the debt then they have to show the debt canceled by a subsequent bk.

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I have been dealing with one of those accounts myself. Original creditor won't budge. I filed a Better business complaint. Hope that will change their mind.

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