Consumer Bankruptcy Journal Spring 2015 - Page 30

EVERYONE CHANCE DESERVES A SECOND By Michael Whitaker CIN Legal Data Services 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 30 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