Consumer debt previously eliminated during bankruptcy proceedings are finally being wiped clean from credit reports by America’s two largest banks: Bank of America and JPMorgan Chase. This movement finally puts these two banks in line with the federal law.
According to The New York Times, over the course of the next three months, the banks will update borrowers’ credit reports, to the great relief of millions of consumers. The bank is required to update a consumer’s credit reports, showing that the debt is no longer owed, once a debt has been erased by bankruptcy, under federal law. Because this rule was disregarded by America’s largest banks, consumers had to deal with unfair red marks and inaccurate credit reports.
Several lawsuits have shed light on how many larger banks are ignoring the discharges from bankruptcy, in an effort to sell off the debt and still collect money from debt collectors, the Times explains.
Neither Bank of America nor JPMorgan are admitting to any misconduct, but they do agree to correct credit reports. JPMorgan said they would correctly record all discharged debts from Chapter 7 bankruptcy by this upcoming August. Also, Bank of America will be making changes on how they report cleared debts that have been sold to financial firms. Credit card debt that has been sold since May 2007 is expected to be removed from consumers’ credit reports.
In addition to Bank of America and JPMorgan, Synchrony Financial and Citigroup have also allegedly deliberately ignored bankruptcy charges, and they face lawsuits as well. Like JPMorgan and Bank of America, Synchrony will be providing similar relief.
The Times reports that although the banks have tried to have these lawsuits thrown out, all attempts have failed. In response to the judge’s criticism in Citigroup’s case, Citigroup stated that they have made a proposal to plaintiffs much similar to what other banks have done.
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.