Can Debts Discharged in Bankruptcy Still Show Up on a Credit Report?

Posted on Nov 17, 2014 By Ron Sykstus

Attorney Ronald SykstusThe answer to this question should be a quick and simple no.   Unfortunately, for many people who file for bankruptcy, discharged debts still appear on credit reports and impact a large number of people who are legally trying to get a fresh start with their financial lives.  Deal Book/New York Times just published a very informative article on this topic.

A very well-respected bankruptcy judge, the Honorable Robert D. Drain from the Southern District of New York,  issued a detailed opinion regarding this area of law and it is referenced in the Dealbook/New York Times article.

The Fair Credit Reporting Act (FCR A) is the federal law that prescribes what information can and cannot be reported on a person’s credit report. We have written extensively on this topic in our previous blog posts.   Once a debt has been discharged in bankruptcy, either a chapter 7 straight bankruptcy or a chapter 13 debt consolidation plan, then the only trade line that can be listed for a particular creditor/debt collector (referred to as a “credit furnisher”) on a debt that has been listed in the bankruptcy is “0 balance-discharged in bankruptcy.”   As referenced in the article, unfortunately, this is most often not the case. The creditor/debt collector will continue to show a balance on a debt and that it is in a collection status or charged-off, all of which is improper and illegal under the Fair Credit Reporting Act. Even more disturbing, as noted by Judge Drain, it is a way for the creditor/debt collector to still try and coerce payment from someone on a debt that has been legally discharged in bankruptcy.

Our lawyers have been handling cases under the Fair Credit Reporting Act and the Bankruptcy Code for several years.  We work with our bankruptcy clients in helping them to dispute and clean up their respective credit reports after bankruptcy. We believe in helping our clients for the long-term so that they can improve their financial lives.  If you are having an issue with something that should not be on your credit reports or something being incorrectly reported on your credit report, either after a bankruptcy filing or if you just have general credit report issues, please feel free to contact our office nearest to you to set up a free consultation to see how we may be of assistance to you.

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