Published On: May 13, 2015

Bank of America and JP Morgan Chase finally agree to properly identify debts discharged in bankruptcy.

According to an article in the New York Times, Bank of America and JP Morgan Chase are finally agreeing to properly identify debts that were discharged in bankruptcy.  Bank of America and JPMorgan Chase have agreed to update borrowers’ credit reports within the next three months to reflect that the debts were extinguished.

There has been a fierce battle over the lawsuits, brought by Charles Juntikka, a bankruptcy lawyer in Manhattan, and George F. Carpinello, a partner with Boies, Schiller & Flexner.

Judge Robert D. Drain, who is presiding over the cases, has repeatedly refused the banks’ requests to throw out the lawsuits. In July, when he refused to dismiss the case against JPMorgan, he said, “The complaint sets forth a cause of action that Chase is using the inaccuracy of its credit reporting on a systematic basis to further its business of selling debts and its buyer’s collection of such debt.”

At a hearing in April, transcripts show, the judge criticized Citigroup for not changing the way it reports debts to the credit reporting agencies. “I continue to believe there’s one reason, and one reason only, that Citibank refuses to change its policy,” the judge said. The reason, the judge went on, is “because it makes money off of it.”

fraud

This problem has plagued close to a million people who have filed for bankruptcy protection, only to find their debts incorrectly reported.   To exacerbate the situation, Bank of America, Chase, Citigroup and Synchrony Financial, formerly GE Capital Retail Finance sold these discharged debts to collectors, and did not disclose they were discharged in bankruptcy.  Why??  Because they could sell the debts for more if they failed to disclosed the were noncollectable debts.

The consequences of these debts still appearing on a credit report without any reference to the bankruptcy discharge?  People lose their jobs or cannot get a job because of this “bad” debt.  People are denied the right to rent or purchase as house, or buy a car.  Harassing calls from these debt collectors “zombie debt buyers”.  These debt buyers call without regard to the truth of the discharged debt.

 

Thank you Judge Robert D. Drain – it is about time someone stood up to these greedy companies who flagrantly ignore the law because they think they are too big to be caught or punished.

You can only hope there is a special place for these folks in the afterlife.

By |Published On: May 13th, 2015|Last Updated: June 22nd, 2022|

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About the Author: Diane Drain

Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.

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“You folks are the BEST OF THE BEST in Arizona.” M.H.

You and Jay are the best attorneys I have ever had or needed and thank God for the Honorable Robert Gottsfield in recommending you folks – I would have never made it through the entire process without you and Jay and God Bless you both always and stay in touch as well. You folks are the BEST OF THE BEST in Arizona.

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I can’t say enough good things about Diane. The way she handled my not typical circumstances was amazing. I was very nervous to start the bankruptcy process but Diane just has a very comforting way of explaining the whole process. My only regret is that I didn’t find Diane sooner. If you find yourself in a financial situation that you can’t correct on your own, please Call Diane Drain as soon as possible.

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