FINANCIAL RECOURSE, for intentional misreporting by Creditor?

[phoenixII]

I had an auto loan where the judge denied reaffirmation in a CH7 BK.
So the loan was discharged.

The case was discharged months ago, and all my creditors are reporting correctly, with discharged debts on my credit report.

However the auto loan company is reporting debt as reaffirmed, and months late torpedoing my credit rebuilding efforts. I have been turned down for even secured cards, while my spouse with identical credit/employment profile is getting accepted everywhere, ( new car loans, credit cards). I have sent in multiple disputes with the credit bureas, all to come back " item status verified with creditor.".

I called in and spoke to there BK department and they said the loan was indeed discharged, and should be corrected. A month later my credit is STILL reporting showing as reaffirmed but delinquent.

Do i have a any recourse for damages from misreporting my credit repeatedly, and showing payment history including time while BK case was active)

[frogger]

Do i have a any recourse for damages from misreporting my credit repeatedly, and showing payment history including time while BK case was active)

Pretty much.... no one cares. Stay on top of the credit bureau in which your are being reported in error. That is where you will solve the problem.

[HHM]

Did you surrender the car?

If you still have the car and the late payments being referred to happened prior to the BK, then that is an accurate report. Also, the reaffirmed entry is actually better than the "included in BK" entry.

As for financial damages, not really. At most, you may have a FCRA (Fair Credit Reporting Act) claim which allows for only minor statutory damages for errors. But good luck trying to bring the lawsuit.

Let me put it this way, would you be wiling to spend $10,000 in legal fees to get $1,000 worth of damages and "hope" that the judge awards you your legal fees?

[disconapper]

You can log a dispute with the credit bureau online...I just did that kind of on a whim because they did not have the right accounts listed as IIB...they fixed it, both Transunion and Experian..and by fixed it...they deleted the accounts from my credit report as if they never existed...

[IBroke]

At most, you may have a FCRA (Fair Credit Reporting Act) claim which allows for only minor statutory damages for errors.

Well, reporting a discharged debt as reaffirmed could also be considered a violation of the permanent injunction.

[HHM]

Well, reporting a discharged debt as reaffirmed could also be considered a violation of the permanent injunction.

Nope.

Violation of the Discharge injunction is any attempt to "collect" a debt. Reporting a more favorable entry on a credit report, albeit an erroneous one, is very unrelated to the discharge.

It sounds like the derogatory entries have something to do with late payments.

[IBroke]

Reporting a more favorable entry on a credit report, albeit and erroneous one, is very unrelated to the discharge.

Reporting a discharged debt as "reaffirmed" by no means is automatically "more favorable". Imagine having a large auto-loan or mortgage which was discharged reporting as "reaffirmed". Good luck getting a new loan or mortgage in the future without having the error fixed..

Violation of the Discharge injunction is any attempt to "collect" a debt. Reporting a more favorable entry on a credit report, albeit and erroneous one, is very unrelated to the discharge.

As I said, it's not as clear as you just stated. Some courts have already ruled that credit reporting IS an attempt to collect. Other courts didn't. That's why I stated that the reporting MAY be a violation of the permanent injunction which is accurate.

"Bankruptcy courts have awarded damages due to incorrect and misleading credit reporting under numerous legal theories, including violation of the discharge injunction and automatic stay provisions of the Bankruptcy Code, as well as violation of the federal Fair Debt Collection Practices Act (“FDCPA”) and Fair Credit Reporting Act (“FCRA”). However, application of these laws varies within the court system.

The bankruptcy discharge injunction “operates as an injunction against the commencement or continuation of an action, the employment of process of an act to collect, recover or offset any such debt as a personal liability of the debtor, whether or not such discharge is waived.” One line of bankruptcy cases has held that in addition to the erroneous credit reporting, a creditor must perform some other overt act to collect the discharged debt in order to violate the discharge injunction. These courts reason that the Bankruptcy Code does not require a creditor to take an affirmative step to notify credit reporting agencies that a debt has been discharged. These courts do not view the mere carryover of the pre-discharge debt on the credit report as an attempt to collect the debt.

A contrary line of cases rejects the requirement of an additional overt act by the creditor, and holds that incorrect credit reporting alone can be a violation of the discharge injunction. Some courts have inferred an attempt to collect from a creditor’s refusal to update its credit reporting post-discharge. Courts have held that the failure to report a debt as “discharged” or “individual in bankruptcy” with a “zero” balance on the account after a debtor has had his debt discharged may constitute a violation of FCRA, the discharge injunction or both."

http://www.natlawreview.com/article/...viting-trouble

[HHM]

Then we agree to disagree. A reaffirmed debt puts a debt back in "good standing". So long as the payments are current, it is a better entry than discharged in BK.

It really depends on the nature of the inaccuracy. In the article you cited, the ONE example had to do with reporting a foreclosure.

Here is the problem...people are too hung up on their credit report. How many times have people asked on this forum, if I BK before foreclosure starts, will the foreclosure appear on my credit report. The answer is no...but that only tacitly (if at all) helps with future credit cards and car loans...but with future mortgages (which is why the question is raised) it doesn't matter because the foreclosure is disclosed/discovered as part of underwriting, so it DOESN'T matter.

As for the OP, it is not clear what is the problem, it sounds like late payments. That is the problem that needs to be addressed, not whether the loan is reported as BK or reaffirmed.

[phoenixII]

Thanks all. After Bk was discharged, we still had the vehicle. They never came for it and no one directed us to do anything with it. ( we filed pro se)
After Discharge- I checked credit reports and they showed account as reaffirmed in good standing. So we were expecting to get a bill and resume payments. A couple months go by and nothing. So WE CALL them directly to see about payments. They say loan is discharged, not reaffirmed, and only way to keep was to pay off completely or car will be repo'd. Customer rep verified in system hat reporting reaffirmed was an error would be corrected and account was discharged. We were going to arrange a voluntary surrender if we could not get a replacement loan on the vehicle, but then found out that this is now being reported on credit as REAFFIRMED, DELINQUENT, ...so of course no finance company would touch it.
So as of yet I have not voluntarily surrendered car yet nor returned the calls of a repo agent. I want to make sure this is truly "discharged" so that I don't turn it over, then get sued for a Deficiency (even mistakenly) after surrender, as this loan showing as reaffirmed. We sent a letter to customer service dept requesting account clarification, and just received a reply to contact the BK DEPT... so following up with them

[HHM]

Thanks all. After Bk was discharged, we still had the vehicle. They never came for it and no one directed us to do anything with it. ( we filed pro se)
After Discharge- I checked credit reports and they showed account as reaffirmed in good standing. So we were expecting to get a bill and resume payments. A couple months go by and nothing. So WE CALL them directly to see about payments. They say loan is discharged, not reaffirmed, and only way to keep was to pay off completely or car will be repo'd. Customer rep verified in system hat reporting reaffirmed was an error would be corrected and account was discharged. We were going to arrange a voluntary surrender if we could not get a replacement loan on the vehicle, but then found out that this is now being reported on credit as REAFFIRMED, DELINQUENT, ...so of course no finance company would touch it.
So as of yet I have not voluntarily surrendered car yet nor returned the calls of a repo agent. I want to make sure this is truly "discharged" so that I don't turn it over, then get sued for a Deficiency (even mistakenly) after surrender, as this loan showing as reaffirmed. We sent a letter to customer service dept requesting account clarification, and just received a reply to contact the BK DEPT... so following up with them

So you were, or were not, behind on payments before filing BK.

If yes, the late payments are an accurate entry and can stay because they occurred before the BK. If the late payments occurred while the BK was pending, it is a gray area (but probably should not be reported as late), if the payments in questions occurred after discharge, those entries should be removed from the credit report.

Also, you are approaching the problem from the wrong end, you FIRST contact the credit reporting agency, not the creditor to dispute the entry. (I only mention this because it is unclear if you have done so).