Discover Card Nightmare -- Any advice?

[needhelpinnj]

Hello! I filed for Chapter 7 on February 17th and am still awaiting discharge. I have been told by my lawyer's admin that it will come any day and the delay was because it got lost in the mail.

I was looking at my credit report and prior to bankruptcy, I had a Discover card. When I filed, I had $0 balance and hadn't used the card in years. They now have listed it on my credit report as a derogatory item for the next seven years.

I went through the credit bureaus to dispute the item and they say this information is correct. I called them and after speaking with 10 people, I finally spoke with someone in the bankruptcy department. He told me that it is my fault I filed for bankruptcy, they are one of my creditors, and this is what I deserved. He said my lawyer should have told me to close the account prior to bankruptcy and it's my lawyer's fault.

Meanwhile, I have Citibank and other cards who did not do this.

Has anyone else had this experience? Is there anything I can do? My lawyer is on vacation this week. I'm considering filing a complaint with the Dept. of Consumer Affairs.

I will NEVER get a Discover Card again.

[panda]

Yep, if it was not closed they can do this. They did it to me also and after checking into everything it was legal. I wish I had closed it, if I had known I would have done so. Discover was the only one to do this, I had many others who just closed the account down after the bk was filed, but discover showed themselves as discharged in bk and the last payment I made as the first default date, which was more than a year prior to bk and was actually when I paid the account off. They fixed the last payment date and took of the notation as first default date, but left the discharged in chapter 7 notation. I don't like it, but it is what it is.

[needhelpinnj]

Thanks for sharing your story. It's too late for me to do anything so I'm going to pursue futher. Thanks again

[angles]

We had a discover card and have not checked our credit report so I don’t know what they have done but they do things differently. We paid them off completely prior to filing thinking we may be able to keep them through the BK. Of course that did not happen. We called several months after filing and asked about the card and they said I would have to reapply. OK, so I did right there on the phone. But the person said our account has been suspended. So I asked, have I been denied (thinking my next question was to get a credit report). The response was no, just that your account is suspended. I think they suspend accounts rather then canceling them as a way to avoid any legal requirements they may have that would go along with a rejected application.

[IBroke]

Yep, if it was not closed they can do this. They did it to me also and after checking into everything it was legal.

It doesn't matter if a TL is open or closed at the time of filing when it comes to the reporting of "IIB". The only thing that counts is the balance at that time.

[IBroke]

I called them and after speaking with 10 people, I finally spoke with someone in the bankruptcy department. He told me that it is my fault I filed for bankruptcy, they are one of my creditors, and this is what I deserved. He said my lawyer should have told me to close the account prior to bankruptcy and it's my lawyer's fault.

No, at the time of filing, they weren't "one of your creditors" since you didn't owe them a penny. The guy you spoke to has no idea.

In a bankruptcy, DEBT is discharged and not accounts. If you don't carry a balance (either credit or debt) on a specific account the moment you file, it's not part of your bankruptcy. Period.

[needhelpinnj]

What can I do then? They are not willing to remove it. The first person who posted had the same experience.

[IBroke]

What can I do then? They are not willing to remove it. The first person who posted had the same experience.

You send Discover a Certified Letter Return Receipt Requested (CMRRR), including a copy of your credit-report showing the wrong reporting and if possible, any proof that the account balance was indeed $0 the day you filed. Then explain to them that a TL with a $0 balance can't be included in Bankruptcy and if they disagree, they should tell you where an account with a $0 balance should be listed on the petition. As debt? As an asset?

If they want to keep up the claim that they were one of your creditors when you filed, include the following legal definition of the term "creditor":

"An individual to whom an obligation is owed because he or she has given something of value in exchange. One who may legally demand and receive money, either through the fulfillment of a contract or due to injury sustained as a result of another's negligence or intentionally wrongful act. The term creditor is also used to describe an individual who is engaged in the business of lending money or selling items for which immediate payment is not demanded but an obligation of repayment exists as of a future date."

http://legal-dictionary.thefreedictionary.com/creditor

As you can see, if the balance was $0, the legal definition of "creditor" is not met. Not even in a long shot.

Tell them they have 30 days after the receipt of this letter to remove the incorrect "IIB"-notation from your credit-reports or you will seek legal action against them for violating the FCRA (Fair Credit Reporting Act).
And if they still don't correct it, take it to your attorney and let him/her write them a letter. This might cost you a few bucks but an official letter from an attorney can do miracles. Suing them is the last resort and you would have to decide for yourself if you want to go all the way.

I know for sure that I wouldn't accept ANY derogatory information on an account where I always met my obligations to pay on time and which I paid off prior to my BK.
I even had (and have) two CCs that had a $0 balance when I filed and both are still open and in regular use. None of them show "IIB" and THAT is accurate.

[panda]

needhelp, let us know if you do what IBROKE suggests and if it works. As noted above I did try to get this taken care of and kept coming up against the fact it was my account, it was an open account pre-bk, therefore the creditor could report it as IIB, I would love to know of just one person who actually did something about Discover doing this (or any other creditor for that matter) and who has managed to get this cleared up, as I think it is a terrible practice to take a perfectly clean account and shut it down with an IIB notation. My other open accounts just closed the accounts with all of the good history still reporting.

I did dispute the Discover Card account with the credit bureaus, then sent the form returned by the credit bureau to Discover saying the credit bureau had investigated this dispute and that it was verified by Discover, along with a letter demanding that they clear up this mis-reporting. (CMRR)I had not used this account in months and had never been late on anything until we were ready to file for bk, they were using my last payment date which was the payoff as my default date (?) which is the only thing they cleared up, they took off all late reporting, but left the IIB as I noted previously.

My credit report is looking good right now and I am not willing to rock the boat over this issue unless it would provide me with a good return on time spent with it, now if more items were wrong on my credit report I may be doing more about it, but so far we have everything else reporting correctly and accurately.

Good luck.

[Flamingo]

To the OP - if Discover was not included in your filing and was just an open, zero balance, account at the time of your filling, it was not included in your bankruptcy and they cannot list the account as derogatory unless you had previous late payments and it was already being listed as derogatory to begin with prior to filing. If you have never had a late payment to Discover prior to you paying off the account, the worst that Discover should be able to do is close your account and list account closed by creditor. Any Bk reference should not apply to that account.

[needhelpinnj]

Thanks everyone for the advice.

Justbroke - have you done this before and it worked? What type of lawyer would write the letter? The one that filed my bankruptcy potentially?

Flamingo - This is not what Discover is telling me. I have had a zero balance for years. They claim that since the card was open when I file, they are my creditor, and I just have to deal with it for the next seven years. It's their policy.

Panda - I'm like you. I don't want to spend more time on it unless there's going to be a return. My credit score is 700 and considering I filed in February 2011, I'm not complaining.

[IBroke]

Justbroke - have you done this before and it worked? What type of lawyer would write the letter? The one that filed my bankruptcy potentially?

I was so fortunate that my positive TLs weren't affected due to my BK, so I didn't face the EXACT situation - but I certainly had other issues where contacting the creditor directly worked. You can certainly ask your BK-attorney to write the letter.

Flamingo - This is not what Discover is telling me. I have had a zero balance for years. They claim that since the card was open when I file, they are my creditor, and I just have to deal with it for the next seven years. It's their policy.

It would be interesting to see if they would be willing to put that "policy" in writing. You can ask for that in your CMRRR as well. I have my doubts...

Their "policy" does not supersede the FCRA. Credit-reporting is governed by that and not by company-policies. Thank God!

Again, a "creditor" is not defined by an open or closed account. It is defined by the question if you owe money or not.

[needhelpinnj]

Thank you for the advice. I will talk with my lawyer about it.

[CCC]

I heard Discover is hard to deal with, but I'm sure that they will send you a letter that you can send to the different bureaus that says that this account has been closed.

[df04527]

What bas***rds ...i would sue them and the guy who said you deserved it....grrrr