Incorrect Credit Report

[jtrtet]

We received Ch 13 discharge on September 11 and are battling incorrect credit reports. Included in Ch 13 was an auto loan which is being reported 30 days past due ever since we began the plan in 2007. I disputed this of course but Experian says it has been verified. When I look at the payment history on the report, it states payment $410.00, received 388.00 every single month for 4 1/2 years. I believe this is what is generating the past due history. Is this legal? The Court determined what Capital One would be paid. Can they report us as late under these circumstances? Thanks for any help. Cleaning up all the erroneous information on the credit reports is surely tedious.

[justbroke]

They cannot report this as such. They could -- and probably should -- report it as Included in Bankruptcy with a $0 balance. You will need to find the Bankruptcy Department at Capital One Auto and send them a demand letter, return receipt requested, informing them that they are in violation of the permanent discharge injunction and that you will seek damages. The reporting as such is basically an attempt to collect the debt since it is affecting your credit. I would get right on top of this. It could take 30-60 days to get it all straightened out.

I would also carbon copy that same letter for the 3 credit bureaus and demand that they too honor the bankruptcy stay. Make sure you provide the appropriate "identification" when addressing the credit bureaus since they like to just respond with "we don't know who you are"... blah blah blah... "privacy concerns".

[jtrtet]

Incorrect Credit Report

They cannot report this as such. They could -- and probably should -- report it as Included in Bankruptcy with a $0 balance. You will need to find the Bankruptcy Department at Capital One Auto and send them a demand letter, return receipt requested, informing them that they are in violation of the permanent discharge injunction and that you will seek damages. The reporting as such is basically an attempt to collect the debt since it is affecting your credit. I would get right on top of this. It could take 30-60 days to get it all straightened out.

I would also carbon copy that same letter for the 3 credit bureaus and demand that they too honor the bankruptcy stay. Make sure you provide the appropriate "identification" when addressing the credit bureaus since they like to just respond with "we don't know who you are"... blah blah blah... "privacy concerns".

Thanks JUSTBROKE for your answer. I have always gotten great advice on this forum.

[HHM]

Not sure a pure credit reporting error is a "discharge injunction" violation unless combined with some overt effort to collect. It is a FCRA violation, but not a discharge injunction.

In any event, the reporting is erroneous and you need to go to the next level which is to request an investigation. However, when you request an investigation, it freezes your credit report and puts a hold on the report.

How soon will the car be paid off? Or is it paid off? I imagine it has got to be paid off soon. If it will be paid off shortly, it may not be worth doing anything.

[justbroke]

HHM, our judges in Florida have found that knowingly incorrect reporting, especially after the debtor demanded the correction, is an act to collect and a violation of the stay. The Aurora Loans case is one which had 4 counts in the complaint, but Count 1 (and Count 2) was not dismissed. It was for reporting to the credit bureau. Counts 3-4 were dismissed because they were FDCPA/FCRA claims, just as you mentioned. The debtor incorrectly tried to make actual FDCPA/FCRA/FUDTA claims with the complaint in the Bankruptcy Court.

However, the court distinguished the reporting to the credit bureau (Count 1) as actionable as a stay violation and it proceeded. It may have been because they (Aurora) also proceeded to foreclose, but foreclosure was inevitable anyhow. The case ended up in mediation (jointly stipulated) and settled outside the AP.

I was relying on that case for one of my creditor reporting "errors".

[HHM]

Come on JB, you know the rule, cite the case if you are going to be that specific

[justbroke]

Come on JB, you know the rule, cite the case if you are going to be that specific

I did. Wynne v. Aurora. It's in the link above, only I labeled the link as the "Aurora Loans" case above. It was Wynne V Aurora, AP # 3:09-ap-97-PMG, Florida Middle District (Jacksonville) 1/14/20120, and heard by the Chief Judge Glenn. It may have been the totality of the circumstances, but Judge Glenn did through out Count 3 and 4 that had specific FDCPA/FCRA/FUDTPA implications. I used this case as the basis of my argument for one of my creditors. All of my complaints on dischargeability were settled.

From the Order...

[Plaintiff alleges that...] Aurora violated the automatic stay by (1) informing a credit reporting service that the Debtors owed a delinquent debt, (2) filing and serving a foreclosure action, and (3) communicating directly with the Debtors in an attempt to collect the debt. (Doc. 1, Paragraphs 12-15). The Debtors further allege that, after the entry of the Discharge, Aurora violated the discharge injunction by (1) obtaining a final summary judgment in the foreclosure action, and by (2) continuing to inform the credit reporting service that the Debtors owed a delinquent debt. (Doc. 1, Paragraphs 17-18).
.
.
Count II of the Debtors' Complaint is an action for damages for violation of the discharge
injunction. Aurora contends that Count II should be dismissed because there is no private right of
action for violations of the discharge injunction, and because the Debtors did not seek an order of
contempt. (Doc. 7, pp. 8-13).
.
.
Under these circumstances, the Court finds that the Debtors alleged the essential elements of a
contempt action based on a willful violation of the discharge injunction. Specifically, they alleged the
existence of a valid order, Aurora's knowledge of the order, and Aurora's violation of the order. In re
Motichko, 395 B.R. at 25; In re Meyers, 344 B.R. at 65; In re Singleton, 269 B.R. at 275. Aurora's Motion to Dismiss Count II of the Complaint should be denied.
.
.
The Motion to Dismiss Adversary Complaint filed by Aurora Loan Services LLC is denied as to Count I and Count II of the Debtors' Complaint.

[HHM]

http://pacer.flmb.uscourts.gov/pdf-new/54764093.pdf It is the only reference I could find to the and it is simply the Order denying dismissal.

If the above link is to case you are referencing...then...

JB, JB, JB...that court decision does NOT stand for what you think it does.

The court DID Not hold that a FCRA claim was a per se violation of either the automatic stay or the discharge injunction. The procedural context of that order was in response to defendants motion to dismiss. The burden is much lower and the court does not make a ruling on the underlying merits, only that the stated allegations create a colorable claim. As to the stay violation, the other two facts specifically mentioned by the court are the more compelling, Aurora initiated and served a foreclosure summons after the BK filing. As to the discharge violation, the other charge was the continuing of the foreclosure and receipt of a deficiency judgment. In a dismissal action, the court only dismisses claims, not facts.

I am glad the court left open the idea that improper credit reporting "could" be a violation of either the auto stay or discharge injunction, but this case, the way I read it, does not stand for the premise that credit reporting, by itself, would give rise to a claim.

Unless you have the judgment of the underlying AP, I don't think this case goes far enough to prove the point. In each count, the alleged violation was coupled with a more over act to collect; so it is easily distinguishable. Also, I think the debtor is in an uphill battle to prove a "willful" violation for only a credit reporting issue when there are no other actions to try to collect the debt.

I would not be comfortable telling someone to reopen a case based solely on a credit reporting issue based on the case you cited. And of course, that court pointed out that violation of the discharge order only has a "contempt" remedy, not a damages remedy.

[justbroke]

No, I absolutely agree that the FCRA/FDCPA/FUDTPA questions were all tossed by the court and allowed those counts to be dismissed. Those were specifically counts 3 and 4.

I was addressing the court's refusal to grant summary judgment in favor of the defendant for a dismissal on counts 1 and 2 which were precisely about credit reporting itself. You are also right, and as I also wrote in my post above, the case went to arbitration and the plaintiff dropped the complaint.

I like it for what it is... the court left it open that it would hear the (non-FCRA) count(s) on adverse reporting as a violation of the permanent discharge injunction in 11 USC 524. I would also not re-open a case solely on credit reporting alone. You do need something else overt, such as, maybe, the refusal to remove the entry with some sort of response from the creditor that you didn't pay so it's staying. Remember, this was a post-petition credit reporting. It was not where the creditor was reporting up until discharge and then stopped reporting for those months after the discharge. So this case is fact-specific on the post-petition reporting that a discharged debt/account is "late" and past due.

They settled after arbitration.

My whole strategy on these things has been to demand the removal and claim that the act was a stay violation. I then wait for them to respond and depending on their response, you could actually prove it as a stay violation. For example, if I send the demand letter and they say "sorry" and then remove it... I'm okay. If they respond with "you have to pay"... well, then it's a stay violation. If they don't respond, then I'm stuck! My original response should have been clearer that it "may" be a stay violation based on the totality of circumstances. I guess that is why i always recommend that people write the creditor, demand the removal, and make a statement that you "consider" it a stay violation and are prepared to seek redress with the court.