Posts Tagged ‘credit report’

Dispute Negative Entries on Your Credit Report

Aug 14, 2011 • No Comments • Personal Finance

The law allows you to request an investigation of information on your credit report that you feel may be inaccurate, incomplete or outdated.  No one can legally remove from a credit report accurate negative information, such as bankruptcy, tax liens, judgments or child support.   However, it is perfectly legal to request an investigation of any item on your credit report. There is no charge to you for requesting an investigation.

Inspecting Your Credit ReportIf the credit bureaus cannot verify the information on your credit report, they must remove it.  Under the Fair Credit Reporting Act (FCRA), credit bureaus have 30 days to get back to you with the results of an investigation on your dispute. If you do not hear from them, within 30 days, they must remove the item from your report.

The first step is to review the information on your credit reports. Every person gets one free credit report once a year from each of the three major credit bureaus — Equifax, Experian, and TransUnion.  You can obtain your credit reports at http://www.annualcreditreport.com.  The credit bureaus often have different information, so you should carefully review the information on all three reports before deciding which entries to dispute. Don’t ignore mistakes, thinking that they will be automatically removed. It is up to you to dispute incorrect or outdated information.

Once you have thoroughly reviewed the information in your credit reports, follow these five steps:

1.  Send a letter to the credit bureau. Be as specific as possible about the disputed item. You should send the letter via certified, return receipt mail.  Include a copy of your credit report with the disputed information highlighted.

2.  Send a demand letter. If the credit bureau does not verify the disputed item within 30 days, send them a letter explaining that the bureau has exceeded the statutory 30-day investigation period and requesting that they remove the item from your credit report. Include a copy of your original dispute letter,  and a copy of the return receipt.

3.  Send a second demand letter. If the credit bureau does not respond within 15 days, send a second demand letter. Say that 45 days have passed since you filed your original dispute and renew your demand that the disputed item be removed. Include copies of the original dispute letter, return receipt and original demand letter.

4.  File your dispute directly with the original creditor. The Fair Credit Reporting Act requires the creditor to verify disputed information within 30 days. Ask for written proof, including account statements, and ask the creditor to request removal the item from your credit report with the credit bureaus.

5.  Add a 100-word statement to your credit file. If a disputed item is verified by the credit bureaus and the negative information remains on your credit report, you can add a 100-word statement explaining the item.

Once the investigation is complete, the credit bureau will provide you with the results, along with a free copy of your credit report if the dispute resulted in a change. You can request that the credit bureau send a correction notice to any company that accessed your credit report within the past six months.  If you are dissatisfied with the results, you have the legal right to sue a credit bureau or creditor that violates the Fair Credit Reporting Act. Filing a lawsuit is time-consuming and expensive, however, so it should be a last resort.

A couple of hints and tips:

    • ALWAYS dispute each item in a separate letter. Always include your name, address, and Social Security number for verification.
    • ALWAYS dispute your negatives with the credit bureaus first because as many as 20% of all dispute items will drop off your report after the first dispute.
    • ALWAYS fully document your efforts and never send original documents, only copies.  Keep everything in a single file.
    • NEVER dispute any item at the website of the credit bureau.  You will not have any written records of your dispute (e.g., return receipts), and you are making it much easier for the creditor to respond. Moreover, you will not be able to send documentation supporting your dispute.

If your credit report is in really bad shape, and contains many negative items, don’t expect a quick fix. The process repairing your credit will take time, often from 6 months to a year. Be persistent.

Here are the addresses for the three major credit bureaus:

Equifax
P.O. Box 7404256
Atlanta, GA  30374

Experian Dispute Department
P.O. Box 9701
Allen, TX  75013

TransUnion Consumer Solutions
P.O. Box 2000
Chester, PA  19022

Your credit report says a lot about you and your credit history. The process of cleaning up your credit report may seem overwhelming at first, but if you take it step by step, over time you will find your creditworthiness improving. And that is definitely worth the effort.

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Bankruptcy and Marriage

Sep 9, 2010 • No Comments • Bankruptcy

Bankruptcy and MarriageWhen a spouse is involved, filing bankruptcy can be significantly more complicated than filing a simple individual bankruptcy.

In many cases, a married couple may find themselves entering into complex legal territory when bankruptcy is introduced into the equation.  There are four major factors that affect the decision to file bankruptcy for a married couple where one or both spouses are facing bankruptcy. 

WHEN SHOULD YOU FILE?

Bankruptcy Filed Before Marriage.  When an individual files for personal bankruptcy before his or her marriage, any liens or judgments against the debtor will typically be isolated to the debtor and will not affect the new spouse in any way.  Likewise, the spouse’s assets are usually unaffected.  New applications for joint credit, however, will be affected by the past bankruptcy filing. 

Bankruptcy Filed During a Marriage.  If a person is currently married and files an individual Chapter 7 bankruptcy, that person’s household income will be subjected to a “means test” that determines whether or not he or she qualifies for a Chapter 7.  The means test requires that your total combined household income be considered, regardless of the spouses’ intent to file jointly or individually.  Your spouse’s income could therefore be the tipping point that decides whether you will qualify for Chapter 7, or will have to enter a Chapter 13 and repay some percentage of your debts over time.  Depending on what percentage of debt is co-owned by both spouses, a married couple may decide to file a joint bankruptcy, during which all of the debts and all of the assets of both spouses will be subject to the bankruptcy process.

Bankruptcy Filed After a Divorce.  Bankruptcy filings following divorce are common.  Divorce proceedings are often complicated, life-altering events.  Bankruptcy can sometimes allow a person to get his or her finances back on track after the devastating effects of a failed marriage.  In most cases, joint property is divided during the divorce and is considered the separate property of each individual from the time that the divorce is finalized.  Like assets, joint debts are also divided by the divorce courts (or by a divorce settlement), and the settlement or order will determine who will be personally liable for joint debts after the divorce. 

WHO OWNS THE DEBT?

Individual vs. Joint Bankruptcy Filing.  One of the biggest concerns is that when individuals file for bankruptcy on their own, their non-filing spouses may become a target of creditors. However, while opting for joint bankruptcy filing offers more protections for each spouse, it may be unnecessary for both parties to file.  The decision whether to file a joint or individual petition will depend on numerous factors, including the percentage of joint-to-individual debt, the type and sources of income, and the state exemption laws for the jurisdiction in which the couple resides.

Joint Debts and Debts During Marriage.  How and when debts are acquired strongly affects whether a joint or individual bankruptcy is appropriate.  Certain debts accumulated during marriage will be assumed to be owned by both spouses, even though the legal act of marriage does not establish automatic shared liability on debt.  Generally speaking, a non-filing spouse will be responsible for debts if he or she has signed or co-signed an agreement to incur and pay them.  If a spouse files an individual bankruptcy, the non-filing spouse will continue to be liable on any joint liabilities or common debt.  Moreover, the protections of bankruptcy’s automatic stay are not extended to a non-filing spouse, which means that creditors can still pursue the non-filing spouse while the filing spouse is under bankruptcy protection. 

WHO OWNS THE ASSETS?

Both Washington, D.C. and Virginia are “equitable distribution” states, which means that the bankruptcy estate will consist of all of the debtor’s separate property, as well as half of the jointly-owned marital property.  While all of the non-filing spouse’s separate property acquired before the marriage is still safe, any community property is put at risk in bankruptcy to the extent that the bankruptcy debtor has an interest.

HOW WILL MY BANKRUPTCY AFFECT MY SPOUSE’S CREDIT?

It is natural to want to protect your spouse’s credit from damage related to your bankruptcy filing.  As a preliminary point, every person has his or her own individual credit report and individual credit score.  Nonetheless, creditors of jointly-owned debt will sometimes report the bankruptcy filing on the non-filing individual’s report to show that the non-filing spouse is now solely liable for the formerly co-owned debt.  In turn, this may affect the non-filing spouse’s debt-to-asset ratio, as well, even though both co-debtors were jointly and severally liable on the debt before the filing spouse’s bankruptcy.

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Chapter 7 Bankruptcy: Step by Step

Jul 26, 2010 • 2 Comments • Chapter 7

If you are considering filing bankruptcy in DC or Virginia, then you should familiarize yourself with the following brief overview of the process.  You may be aware that bankruptcy involves a complex set of laws and procedures specific to each individual jurisdiction.  DC exemption laws are very different from Virginia exemption laws.  Since filing for bankruptcy may seem daunting at first, read below for the ten steps of a successful Chapter 7 bankruptcy.  If you have any questions, post a comment and I will address your concerns as promptly as possible.

1.  Run your credit report.
You may think you know your finances inside and out, but until you know what the credit bureaus know (or believe) about you, you’re operating only on your own subjective opinion.

2.  Meet with a bankruptcy lawyer. 
Schedule a free consultation with Lee Legal and determine whether bankruptcy is right for you.  There are other options to bankruptcy. 

3.  Get credit counseling.
Prior to filing a bankruptcy, you must attend a brief course, either online or over the phone, called the pre-filing credit counseling course.  You will obtain a “certificate” which is valid for 180 days.  Most of my clients have reported credit counseling to be a waste of time and money (it costs about $50), but it is a requirement for filing. 

4.  Sign off on your paperwork.
You will meet with your lawyer again and sign your bankruptcy petition and schedules.  You must disclose all of your debts and all of your assets.  When you sign off on your bankruptcy filing, you do so under penalty of perjury, so you must pay close attention and be completely forthright with your attorney during this step. 

5.  Direct your creditors to your attorney.
Once your bankruptcy has been filed, the Automatic Stay of your bankruptcy directs your creditors not to contact you directly.  If your creditors, for some reason, did not receive notice, of if they are willfully violating the Automatic Stay, you should provide them with your case number and your attorney’s contact information.  Then hang up.

6.  Attend the meeting of creditors.
Also known as the “341 meeting,” the meeting of creditors is a mandatory hearing where the trustee will question you, under oath, about your bankruptcy filing.  Your creditors may also question you at the meeting, however creditors attend only under certain circumstances. 

7.  Respond to your attorney’s request for documents. 
Occasionally the trustee will raise questions at the meeting of creditors that will require additional documentation.  Because the trustee is operating under statutorily-defined deadlines before which he or she must raise objections, it is important to communicate with your attorney after the meeting of creditors and to promptly respond to requests for documents.

8.  Complete the debtor education course.
That’s right, you will need to attend another course, called the debtor education (or personal financial management) course.  Very much like the pre-filing credit counseling course, you may attend either online or over the phone.  You wil obtain another “certificate” which must be filed by a pre-determined date.  If you do not take the course, you will not be granted a discharge. 

9.  Play the waiting game.
Your creditors have 60 days to file an objection in your case.  If this period elapses without objection, then you are entitled by matter of law to a discharge of your debts.  Your attorney will notify you by phone or email, and you will receive your Discharge Order from the court by mail. 

10.  Keep an eye on your credit (and your creditors).
Once you have received your discharge order, you should immediately take steps to rebuild your credit.  About four months after you receive your bankruptcy discharge, you should run your credit reports to ensure that they are accurate.  After all, your goal post-bankruptcy is to boost your credit score quickly.  Inaccurate information on your credit report will only prolong the time it takes to score high enough for conventional credit.  Request reports from all three of the major credit bureaus carefully review all of the entries on each report.

Would you like to learn more on how to file bankruptcy in DC?  Call Lee Legal at (202) 448-5136 to schedule a free, confidential consultation with an experienced bankruptcy attorney.

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What is Skip Tracing?

May 14, 2010 • 2 Comments • Debt Collection

Skip tracing (or “skiptracing”) is the imprecise and frequently inartful process of locating a person’s whereabouts by whatever means available to the skip tracer.  Skip tracing tactics are most often employed by debt collectors, although the methods are also used by law enforcement, private investigators, bounty hunters, and journalists. 

The “skip” in skip tracing has two meanings.  First, skip tracing is often employed to locate those persons who have “skipped town,” or moved to a new residence in a way that has escaped the attention of parties interested in that person’s location.  Second, the “skip” in skip tracing refers to the “skipping” between often scarce or minimal pieces of information and persons available to the skip tracer. 

Skip tracers typically have access to huge commercial databases, credit reports, criminal checks, and public tax records.  In addition, skip tracers will ultimately resort to power of subpoena to access otherwise unavailable information, such as utility records, government job application information, utility bills, and social security and disability records. 

To locate a subject, skip tracers will call and/or correspond with current and former employers, family members, landlords, neighbors, and personal and professional associates of all kinds.  Skip tracers often conceal their true identities and motives in order to gain more information.  This form of deception, known as “pretexting,” is legal in both Washington, D.C. and Virginia.

If you are being harassed by your creditors and their agents, or you suspect that you are being targeted by a skip tracing company, then I may be able to help you.  As a bankruptcy lawyer in D.C., I can help you by putting an immediate stop to all collection efforts, including the shady practices of skip tracers.

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Repairing Your Credit After Bankruptcy

Apr 28, 2010 • 2 Comments • Bankruptcy, Personal Finance

If you are considering filing for bankruptcy protection, you have likely considered what effect it will have on your future finances.  After all, bankruptcy is a matter of public record, and the bankruptcy will remain on your credit report for 10 years.  In addition, your credit score will take a major hit when you file.  Reality check: it won’t be as bad as you might think.

The first few months following your bankruptcy filing will be the hardest.  Most lenders run a credit check and will see your bankruptcy, making obtaining financing or credit more difficult.  The older the bankruptcy becomes, the less effect it will have on your credit.  In fact, the impact of the bankruptcy on your credit score will begin to diminish immediately after your case is closed.   The more committed you are to rebuilding your credit, the more quickly it will improve. 

GET A CREDIT CARD

Ironically, the very best way to go about repairing your credit after a bankruptcy is to obtain new lines of credit.  Potential lenders’ reasoning is this: the worse your credit history, the more you need access to open credit lines to demonstrate that you are a trustworthy borrower.

Most of my clients begin receiving credit card offers almost immediately after their bankruptcies are finished.  If you cannot obtain an unsecured credit card, however, you should take out a secured card.  Secured cards are like prepaid lines of credit, and will allow you to book hotel rooms, purchase airline tickets, and travel without cash.  In addition, many secured card lenders punctually report timely payments to the three major credit bureaus.  This will give your credit score a big boost, making it easier to get an unsecured card or a line of credit down the road. 

While credit cards are one of the best ways to repair credit after bankruptcy discharge, you must pay your credit card balances entirely, on time, every month.  Even one late or missed payment will set you back significantly. 

GET AN AUTO LOAN OR MORTGAGE

Car loans usually become possible after about a year from your bankruptcy discharge.  The rates are  usually not very attractive, but these will improve the longer you wait after your bankruptcy case is closed.  Mortgage loans are usually possible after two years from your bankruptcy discharge.  With either auto loans or mortgages, be sure to shop around for the best rates.

MONITOR THE CREDIT BUREAUS

Approximately four months after you receive your bankruptcy discharge, you should run your credit reports to ensure that they are accurate.  After all, your goal post-bankruptcy is to boost your credit score quickly.  Inaccurate information on your credit report will only prolong the time it takes to score high enough for conventional credit.  You should request reports from all three of the major credit bureaus: Experian, TransUnion, and Equifax.  Carefully review all of the entries on each report.  Debts that were discharged through bankruptcy should be accurately reported along with “good items,” including accounts that were “paid as agreed” and any other accounts that you continue to pay on time that were not discharged in the bankruptcy.

If you find any discrepancies, you must contact each of the bureaus separately, in writing, and request that they change the information.  It may also help to contact the creditor and request that they report the accurate information to the bureaus.  In another four months, you should repeat the process.  Credit bureaus generally have 30 to 45 days to investigate your claim.

You can request a free copy of your credit reports once a year at http://www.annualcreditreport.com. 

BE PATIENT

If you pay your bills on time and in full every month, your credit will steadily improve.  The more time that elapses since your bankruptcy discharge and the more quickly and effectively you engage the above strategies, the quicker your credit score will recover.

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