Credit Reporting Agencies Must Delete Bankruptcy Debts
You get your bankruptcy discharge, try to refinance your mortgage, and are told you do not qualify because of a debt or debts still on your credit report. I'm sure you are wondering how can this be? It is called zombie debt; debt that will not die.
There are many companies which buy bad debts, for pennies on the dollar. So collecting just a few of them will still let them make money.
The cheapest way to collect that debt is to put it on your credit report.
The debt is reinserted, under the name of the zombie debt buyer.
No expense for mail or phone calls. The bottom feeding debt buying companies are waiting for you to refinance, figuring your back will be against the wall, and you will pay them to keep the mortgage deal since there will not be enough time for your lawyer to get relief in court.
Most people who have filed bankruptcy have zombie debt on their credit report. The Judge ordered Trans Union, Equifax and Experian, to change their systems to clear ALL debt from people who have bankruptcy discharges.
He put the burden on the credit bureaus to show why it should carry a debt that predates a bankruptcy.
Some debts should still be listed. If you reaffirm a debt, you are still legally liable, and your payments should be reported.
As always, you should keep up to date on what is on your credit report. Just because the Judge ordered it, does not mean the credit bureaus will comply