Post - Bankruptcy Credit Reporting of Consumer Debts.

I have seen a recent increase in the number of Arizona debtors who have discharged debts in bankruptcy which are still reporting on their credit reports as current collection accounts or charge offs, and showing a balance owed. 

Once a debtor has received a discharge in bankruptcy, the creditor or the debt buyer who purchases the debt can no longer report the account to the credit reporting agencies showing a balance owed or that the account is a current collection account. Many times, however, the negative collection or charge off information is still sitting on the credit report from before the bankruptcy. 

The obvious problem with this continued reporting of discharged debts is that anyone looking at your credit report, including banks, mortgage lenders, car dealerships,  and insurance companies, etc. think that you have now defaulted on a debt after you filed bankruptcy. This drops your credit score, commonly referred to as a FICO score, significantly. And no lender is going to give you a loan with a current charged off or collect account on your credit report.

Under the Fair Credit Reporting Act, or FCRA, you have a right to contact the credit bureau and dispute the reporting of the account. (Click here for instructions on how to dispute information to the credit reporting agencies). If it is not corrected, then you may need to take legal action to get the attention of the bank or debt buyer in order to correct the credit report.

If you are an Arizona consumer who has received a bankruptcy discharge but still has derogatory credit information reporting post-bankruptcy, please call Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822 for a free consultation and review of your credit reports.

MIDLAND CREDIT MANAGEMENT, INC. CONTINUES TO COLLECT FROM ARIZONA CONSUMERS AFTER CONSUMERS FILE BANKRUPTCY

Midland Credit Management, Inc. Continues Collection of Accounts from Arizona Debtors after Receiving Notice of Bankruptcy Filing.

Midland Credit Management, Inc., the sister company to Midland Funding, LLC, seems to have made it a regular practice to ignore the notices it and Midland Funding, LLC receives from the bankruptcy court so that it can continue to collect against Arizona consumers. Midland’s actions are illegal.

Arizona Debtor Sues Midland Credit Management, Inc. in Arizona Federal District Court for Harassing Phone Calls.

In December 2010, I filed a suit under the Fair Debt Collection Practices Act or FDCPA against Midland Credit Management on behalf of an Arizona consumer who, after filing bankruptcy, continued to receive numerous harassing telephone calls from Midland.  Midland ignored the consumer’s efforts to tell the collector that she had filed bankruptcy and that she had an attorney.  Midland continued to collect on a debt that she had included in her bankruptcy.

Before the calls began, Midland Credit Management and Midland Funding, LLC had received two notices from the bankruptcy court of the consumer’s bankruptcy filing.  One notice was mailed to Midland by the bankruptcy court, and the other was electronically send by the court.  Both notices informed Midland that the debtor was represented by a lawyer, and thus it was illegal for Midland to directly contact the consumer and to attempt to collect the debt.

Arizona Consumer Sues Midland Credit Management, Inc. in Arizona Federal District Court for Contacting Her after She Had Filed Bankruptcy and Knowing She Was Represented by a Lawyer.

In the second case, Midland Credit Management, Inc. had received two electronic notices from the bankruptcy court in early November 2010 of the consumers’ bankruptcy filing.  Despite these notices, Midland sent two letters, one in November and one in December, directly to the wife demanding payment on an account it claimed was owed.  Midland also directly sent the husband a letter in January 2011 on another account that was in his name only.

FDCPA Prohibits Direct Communication with a Consumer it Knows Is Represented by a Lawyer.

The Fair Debt Collection Practices Act or FDCPA protects Arizona consumers from debt collectors communicating directly with them once they have hired a lawyer.  So, any Arizona debtor who files bankruptcy using a bankruptcy lawyer should not receive any direct contact from a debt collector.  And, if a debt collector does contact the consumer directly, then the creditor would be in violation of the FDCPA.

If you are an Arizona consumer who has filed bankruptcy using a lawyer, and has been contacted by a debt collector after the bankruptcy, please call Floyd W. Bybee at the BYBEE LAW CENTER, PLC (480) 756-8822 for a free phone consultation to see if I can help you.

Arizona Consumers Hounded on Discharged Debt.

Are you an Arizona consumer who has filed bankruptcy within the past few years?

Are your creditors still trying to collect your discharged debt?

Are your discharged debts still reporting as owed on your credit report?

I am regularly contacted by Arizona debtors who are still suffering the collection harassment the bankruptcy was supposed to stop!  Unfortunately, many creditors sell the debts after they get notice of your bankruptcy. And, the debt-buyers who buy these accounts ignore the bankruptcy and hope you will too.

Sometimes their tactics are subtle, like reporting the accounts as outstanding to the credit bureaus, or sending soft letters suggesting that paying the debt will improve your ability to get new credit.  Either way, they are violating the bankruptcy laws and perhaps the federal Fair Debt Collection Practices Act (FDCPA).

Sometimes they act much more boldly.  When you question the validity of the debt, the creditor or debt-buyer will suggest that perhaps the debt was not discharged in the bankruptcy and that you still owe the money.

The bottom line is that if a creditor, a debt-buyer, or a collection agency makes any attempt to collect one of the debts included in your bankruptcy, they have violated the law.

If you are an Arizona consumer, I may be able to help you stop the collection attempts, and recover damages from these unscrupulous collectors.  I offer a free phone consultation.  

Call me, Floyd W. Bybee, at 480-756-8822

FDCPA or Bankruptcy? Remedies for Arizona Debtors to Stop Collection Abuse and Harassment.

Both the FDCPA and Bankruptcy give Arizona consumers possible remedies for stopping collection harassment and abuse.  The FDCPA allows Arizona consumers to recover damages from third party collectors who have harassed them, thus usually stopping any continued harassment.  Bankruptcy, on the other hand, usually stops collection harassment with an injunction against all collection activity. (I say usually, as sometimes the harassment continues even after filing bankruptcy)

Many Arizona debtors find that they need to file for bankruptcy, but do not have the money needed to pay the lawyer’s fee up front.  Some law firms will sign up the client, but do not file the bankruptcy case until all the lawyer’s fees have been paid — sometimes as much as $2,000 - $3,000 — which may take up to six months or more to pay.  In the meantime, the collection harassment continues with no apparent remedy.

Use Both FDCPA and Bankruptcy!

My experience has been that many Arizona debtors have one or more existing claims against third party debt collectors by the time they meet with a bankruptcy lawyer.  Under the FDCPA, the consumer is entitled to recover damages, including statutory damages of up to $1,000, from the violating collection agency.  If pursued, these FDCPA cases may provide the additional money needed to pay the bankruptcy lawyer’s fees.  So, by using the FDCPA, Arizona consumers are able to ultimately file their bankruptcy cases sooner, and with less money directly out of their own pocket.

If You Are Considering Bankruptcy, Please Call BYBEE LAW CENTER, PLC.

If you are considering filing bankruptcy, and you have collectors calling you about your debts, please call Floyd W. Bybee at (480) 756-8822 for a free phone consultation to see if he can help you.

Credit Reporting After Bankruptcy; Or How to Start Your "Fresh Start"

Most Arizona consumers file bankruptcy in order to get a “fresh start” on their financial life. Yet, it is not uncommon for this fresh start to be spoiled by one or more creditors that refuse to acknowledge the bankruptcy and to continue to report their accounts to the credit reporting agencies or credit bureaus as if there was no bankruptcy.

Post Bankruptcy Credit Reporting.

Its debatable whether historical information concerning an account pre-bankruptcy can remain on the credit report. However, there is no debate that a creditor cannot report post-bankruptcy information concerning an account such as a current balance owed, a post-bankruptcy charge-off, or a foreclosure proceeding that occurred after the bankruptcy.

Obtaining Copies of Your Credit Reports.

All Arizona consumers should obtain copies of their credit reports about 60 to 90 days after their bankruptcy discharge to see if the creditors have properly updated their accounts to the credit reporting agencies.

The three primary national credit reporting agencies, or credit bureaus, are Experian, Trans Union and Equifax. You can obtain your updated credit report from each of these agencies by going to annualcreditreport.com. These reports should be free unless you have already received your reports within the past year. (There are many look-a-like or sound-a-like websites, but this is the one set up by the reporting agencies as required by federal law. It is advisable to stay away from the others.)

Many Creditors Will Not Update Credit Report Automatically.

Once you have these reports you should review them carefully for errors and to make sure each account included in your bankruptcy has been updated to show a status of “included in bankruptcy.” Some creditors will update the account status to the credit bureaus automatically, but many do not.

Disputes Need to Be Sent Certified Mail, Return Receipt Requested.

If any accounts have not been updated, then you need to send a letter to that particular credit bureau stating that the account was included in your bankruptcy, giving the case number and the filing date, and requesting that the account be updated accordingly.

Your dispute letters must be sent via certified mail, return receipt requested so that in the event your credit report is not corrected or updated, then you have proof of the dispute and proof that the credit bureau received your dispute. If you chose to dispute the accounts on line, which is what the credit bureaus prefer, then you have no proof of your dispute or that the credit bureaus received it. In other words, DO NOT DISPUTE ON LINE.

What to Do If the Accounts Are Not Corrected.

If the dispute process corrects the errors, or updates the report to show the accounts as included in bankruptcy, then you are set. However, if the errors are not corrected, or the updates are not made to each of the accounts, then you need to seek a consumer lawyer to assist you in proceeding against the credit bureau and/or the creditor for false credit reporting.

Contact a Lawyer Experienced in the Fair Credit Reporting Act.

Floyd Bybee of the BYBEE LAW CENTER, PLC represents Arizona consumers who have credit reporting issues under the Fair Credit Reporting Act or FCRA. Bybee exclusively represents Arizona consumers in the areas of false credit reporting, collection harassment, and other consumer credit issues.

If you would like a free phone consultation to see if Bybee may be able to assist you, please call (480) 756-8822.