EVERYONE CHANCE
DESERVES A SECOND
By Michael Whitaker
CIN Legal Data Services
www.cinlegal.com
U
nexpected job loss, medical bills,
large mortgages, and credit card
bills can lead to overwhelming
debt. Many facing tough times turn to
bankruptcy for its promise of a fresh
start and submit themselves to an
intensive legal process, airing out all
of their financial dirty laundry. Sadly, all
too often the promise goes unfulfilled.
Today one in ten filers will experience
errors on their credit report1.
These errors can prevent individuals
from getting credit, housing, or
employment after bankruptcy. To make
matters worse, these errors are not
usually discovered until long after the
bankruptcy has been completed when
they get denied for credit or turned
down for a job.
Often these errors can be resolved by
disputing them with the credit bureaus,
but this takes time and many filers
cannot afford to wait as they seek such
basic necessities as jobs, auto loans, or
housing. The embarrassing experience
of being denied an apartment or credit
often leaves them frustrated and
returning to their attorney months or
years later dissatisfied with the service
provided. Worse yet, they may become
disillusioned with the bankruptcy
process and not even attempt to have
the errors corrected.
A recent bankruptcy filer, Sarah in Ohio,
is one of those who felt deceived by
the promise bankruptcy offered. She
had an unexpected medical condition
that kept her from work for 18 months.
Sarah was faced with overwhelming
debt and turned to bankruptcy for help.
After her case was discharged, she
began applying for jobs, most of which
required a credit check. According to
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CONSUMER BANKRUPTCY JOURNAL
Demos, a New York-based policy and
advocacy organization, in a survey of
human resource professionals, nearly
half of employers check an employee’s
credit history when hiring2.
Sarah had some success in getting
interviews with potential employers but
wouldn’t make it past the final stage of
the process that included a background
and credit check. She started to get
suspicious about what was on her
credit report and decided to check the
report herself. Sarah found debts on
her credit report that were discharged
in bankruptcy and thus negatively
affecting her credit.
Sarah did not see the point in
contacting her attorney to help resolve
the problem. To her, the process didn’t
work and going back to her attorney
would just cost her more money. Sarah
was frustrated and disillusioned with
the process. “I should never have filed
for bankruptcy,” says Sarah.
Some errors on credit reports are not
errors at all. According to a recent
article in the New York Times, “Tens
of thousands of Americans who went
through bankruptcy are still haunted by
debts long after — sometimes as long
as a decade after — federal judges have
extinguished the bills in court.” The
problem is some large banks now have
a policy of refusing to acknowledge
the bankruptcy court discharge. The
filer feels forced to pay off debts that
they have no legal obligation to repay3.
Bankruptcy attorneys can help by
providing further legal assistance to
their clients by suing creditors who fail
to report bankruptcy discharges to the
bureaus.
Spring 2015
For those who go through bankruptcy,
concerns about their credit score looms
large. When surveying over 800 recent
bankruptcy filers, 89 percent were very
interested in getting a credit report after
bankruptcy to verify that their debts
were being accurately reflected on
their credit report4. For the 10 percent
that have errors, dispute advocacy
is essential, but for 100 percent of
filers, it provides peace of mind. The
reassurance that the bankruptcy
process worked the way it should is the
real goal - knowing they truly have a
fresh start.
CIN Legal Data Services has released
Credit Assurance to assist attorneys
and filers after the bankruptcy process.
Filers will automatically receive a credit
report to review for inaccuracies 45
days after a Chapter 7