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Kimberly1972 · Dec 27, 2006, 07:30 PM

I had to file bankruptcy because of a sick house (mold infested) that almost killed my daughter and I. I have and had an excellent income, was never late on anything, but could not afford to fix the home and pay rent for another place to live. Insurance would not fix anything and the cost was more then the home was worth. My bankruptcy attorney told me I had to not pay the mortgage for a few months before declaring, so those payments were the first payments to ever be late in my credit history. I have bought a home and a luxury car since then (4+ years post) and noticed the other day when buying a work vehicle, that now my credit is reflecting my bankruptcy AND late payments on the mortgage. The home was declared in the bankruptcy, sold off and auctioned off by the city for more then I owed. It is my understanding that this is similar to a double jeopardy... being dinged on my credit report twice for the same thing. Is this true and how do I address this?

ScottGem · Dec 27, 2006, 07:35 PM

I'm confused. You declared and were granted bankruptcy and certain debts were discharged. This bankruptcy shows up on your credit report. You expected it wouldn't?

excon · Dec 27, 2006, 08:19 PM

Hello Kimberly:

A bankruptcy doesn't clean up the negative remarks on your credit report. It has nothing to do with a credit report, actually.

It wasn't good advice to NOT make those payments. However, the bankruptcy will count against your credit score much more than will a couple of late payments will. Plus, since you've bought a house and a car since the bankruptcy, you're building your credit score.

Clearly, the bankruptcy happened AFTER the late payments, so it should be clear to anyone (as it was to your present lenders) what happened.

Nonetheless, if you want them removed, challenge them with each of the three credit bureaus. Once challenged, they must re-investigate the remarks. IF they can't substantiate the negative remarks within 30 days, they have to be removed.

Even if the remarks are accurate, you have a very good chance that the mortgage company won't respond and they'll be removed. If not, you're still doing OK, credit wise.

excon

Kimberly1972 · Dec 27, 2006, 08:30 PM

I have received two answers that are not answering my question. I completely understand that the bankruptcy would be on my credit report and the bankruptcy judge told me I had to be deliquent on payments to prove a need for bankruptcy. I don't have ANY issue with the bankruptcy being on my credit report... it will be there for 10 years. I knew that when I had to declare. My issue is that legally you can not be penalized twice for the same issue on your credit. The home was declared and written off in the bankruptcy, so late payments on the mortgage cannot be included on the credit report separately, just as the other items included in the bankruptcy are wrapped up into the bankruptcy. I need advice from a bankruptcy attorney or a financial advisor on how to get it cleared up so that it shows up just as the bankruptcy.

ScottGem · Dec 27, 2006, 08:38 PM

Ahh, now I understand your question. But I still don't know why you think they way you do. You are not being penalized twice. Your loan was delinquent that was one event. The bankruptcy was another event. Even though they are related, they are still separate events that can be listed separately on your report.

It sounds to me like your credit is pretty much repaired so I wouldn't even be concerned about the listings. But whoever told you that the bankruptcy eliminates the late payments that led to it wasn't given you correct advice.

If you want to protest it, all you need do is send a letter to the credit bureau requesting it be removed.

excon · Dec 27, 2006, 08:52 PM

Originally Posted by Kimberly1972

The home was declared and written off in the bankruptcy, so late payments on the mortgage cannot be included on the credit report separately, just as the other items included in the bankruptcy are wrapped up into the bankruptcy.

Hello again, Kimberly:

I understand what you're saying. There just isn’t any law that agrees with you, and it's contrary to the way credit bureaus work. They don't take orders from the court. You seem to think that the credit bureaus are supposed to know what accounts are included in your bankruptcy, and remove all notice of them. That just isn’t so. A bankruptcy doesn't require a credit bureau to DO anything. If you had late payments reported to the bureau before you declared bankruptcy, they're going to stay there.

The ONLY way they can be removed is through the procedure I outlined above. It's true, I'm not a bankruptcy attorney or financial advisor, but I know the law.

excon