Is this a violation of Automatic Stay?!?

[macahs]

My eyes are hurting from searching through all the threads to try and find this answer - so I figured I'd just post it in hopes someone may be able to help.

We are about to have our BK discharged in the next week or so. In preparation, I went to a few of the sites recommended through BF to start cleaning up my credit.

Well, after doing this tonight, I am seeing that a local credit union we used for 2 auto loans has been reporting late every month since the first month we filed bk.

We filed back in Oct. 05 and every single month since shows them reporting late, starting with 30 days, 60 days and now the last few months just say 120 on them.

After seeing this, we are thinking this is major cause to our score being as low as it is - is this true?

Are they violating the Automatic Stay (or any other law) by reporting like this? If they are, what recourse do we have against them?

What do we need to do to repair this - just dispute all those months w/ all 3 cra's?

Thank you in advance - I really appreciate it!

I should also note they cannot claim they were not aware of our bankruptcy as they filed Motion for Relief in March 06 for both vehicles.

[anonymuse]

I don't think there is any violation going on--it's just an error, not uncommon for CRAs in non-BK situations. When I look at my pre-BK CRs, you wouldn't think I was the same person based on how different the three reports are.

You just need to start disputing things with the CRAs once you are discharged and you should see your scores go up since the late payments and high balances will be disappearing.

[macahs]

Is it after the discharge that makes it illegal for them to report 'late' like that (assuming you don't own that debt anymore)?

It doesn't seem right to me that they can destroy my credit even worse by reporting 2 different loans late every month for the past several months.

Thanks!

[anonymuse]

In a Ch 13, those debts are not discharged until your case is discharged and closed.

Don't take the CRAs reporting personally--to them we are just a huge database where numbers are taken from the credit agencies and then put into a big database at the CRAs. And, yes, mistakes happen, and we have to go and fix them sometimes. But they don't destory our credit--most of us on this board did a pretty good job destroying our own pre-BK.

[keepmine]

Actually, it is a violation of the automatic stay and there is some case law on the subject. Notice the bk judge mentions on 2 occasions that reporting lates after filing was a violation.

http://207.41.19.195/scripts/show_matches.pl?file=decisions/20030903-pk-TERRI_J._GOODFELLOW.html&strings=Goodfellow

[anonymuse]

In addition, she suffered damages because of the placement of her account in a reporting agency after Debtor took bankruptcy and after the entry of discharge.

Thanks, keepmine, I couldn't find anything like that in my searches.

[macahs]

Actually, it is a violation of the automatic stay and there is some case law on the subject. Notice the bk judge mentions on 2 occasions that reporting lates after filing was a violation.

http://207.41.19.195/scripts/show_ma...ngs=Goodfellow

Thanks a bunch! We filed Chapter 7 (old law) in Oct. 05.

I just got done pulling all of my hubby's reports as well and the same credit union reported all payments late on his report as well (from Oct 05- April 06, which is when they took the vehicle back).

What recourse does someone have? Obviously I need to dispute these things but they need to know this shouldn't have happened and make sure they think twice before doing it to the next person. I'm not sue happy by any means- I'm just curious to know what a person's rights are when something like this happens.

Thanks again!

[anonymuse]

I just think telling them that reporting incorrectly is in violation of the federal bankruptcy code and that they could face significant fees will light a fire under their butts to correct things.

[macahs]

I just think telling them that reporting incorrectly is in violation of the federal bankruptcy code and that they could face significant fees will light a fire under their butts to correct things.

Yep, that will definitely happen. It stinks that I now have to go in and dispute it with all the agency's they're reporting to - not only for myself but also my husband. I wonder if I have to do this for every single month (a separate dispute for each) or one dispute for all the months they reported incorrectly.

I'll ask one more question that's a little off from this particular one - maybe I could get some help.

If a creditor that was included in the bankruptcy is reporting the debt as a charge off/loss w/ a dollar amount owed (as opposed to Chap. 7 BK/$0 balance) - is this hurting our credit? Is it adventageous and beneficial to dispute this to show the bankruptcy and $0 balance? Does it potentially help our score?

Thanks again!

[macahs]

If they are showing it as a charge off with a balance owed, it's definitely hurting your credit score and it's a direct violation of the permanent injunction which is part of your discharge! They should be showing a charge off with a ZERO balance, but not necessarily until it's discharged.

Also, I disagree about the reporting and the Auto Stay. I specifically asked my attorney (and a friend of mine who is an attorney) and they both say that reporting delinquents during a bankruptcy is NOT a violation of the stay, trying to collect it is. It is a violation of the Fair Credit Reporting Act, but not the Auto Stay. The case law that was submitted seems to have emphasized that the account was still in collection after the discharge and was being reported as delinquent after the discharge.

You know there is a site www.allexperts.com that has bankruptcy attorneys who volunteer to answer questions, I've used them twice and got answers in 24 hours. You should try and ask them.

I would dispute them all after you are discharged and make sure each and every one reports a zero balance.

I have one that's actually reporting a "skip trace" on one of ours! LOL Small banks and credit unions don't always know how to report to the CRA appropriately.

HTH

You know what - I think I will post on that site - thanks for the heads up!

I was reading through that case law and found it very interesting. I can say other than our mortgage company being very sketchy through this whole thing, we have not had anyone calling us to collect, etc. This person's case was that Discovery was really harassing her as well as reporting incorrectly. My interpretation of the law was that a creditor reporting during a bankruptcy is a violation, as it says the "scope of the automatic stay is extremely broad". Here's that paragraph:



Reporting AFTER the discharge is definitely a violation, which does not fall under the Automatic Stay (362). From what I understood of this case law, Section 524 replaces the 362, which protects debtors from creditors reporting negatively (late's, etc.) after the discharge. Here's that specific paragraph:



I'm very anxious to see what happens after it is discharged - which is happening w/in a week or so.

I did notice our mortgage company has already reported June's payment late but also reported a 0 balance, stating it was included in the bankruptcy - which they reported 6/06. We had the case discharged the beg. of June but it was vacated because someone filed a Motion for Relief just before the discharge. So we're actually NOT discharged yet but nice to know the mortgage company is not acknowledging our reaffirmation. We're technically not late either because we were supposed to be entitled to a 90 Day Moratorium due to Fema declaring our county a disaster area from all the recent floods we had. I posted about this in another post but I'm obviously getting off topic.

Thanks again!

[macahs]

A question fairly similar to mine was posted on that AllExpert site and I have to be honest, I was not thrilled w/ the answer the lawyer gave.

Here is the link:

http://experts.about.com/q/Bankruptcy-Law-909/Credit-Reporting-during-BK.htm

I don't think it's "good enough" to just sit back and let a creditor report incorrectly first of all, and second of all, he minimizes how it could potentially hurt your score by someone reporting 30/60/90/120 late during bankruptcy. If you have several creditors all doing the same thing, I'm going to assume your score could jump a significant amount by them being reporting correctly.

The few answers I've read so far on that site have not impressed me. The lawyers answering really minimize the importance of rebuilding credit after a bankruptcy - or so it seems.

This link should bring you to previous questions they answered.

http://experts.about.com/q/Bankruptcy-Law-909/index.htm