Legislation Targets Bankruptcy “Zombies” on Your Credit Report
Most Chicagoans who file for consumer bankruptcy assume that, once their debts have been discharged, they won’t have to worry about seeing those debts on their credit reports, or, worse yet, they won’t have to worry about being contacted by debt collectors about lingering balances that have been discharged in bankruptcy. However, according to a recent article in The Fiscal Times , that is exactly what is happening to many consumers. There is currently no strict law “saying that, when a consumer satisfies a debt, the bank actually has to led credit reporting agencies know about it.” Because it is not a hard and fast rule, “debts that have been discharged in bankruptcy can longer on credit reports for as many as ten years, and some of these completed debts have even been resold to debt collectors.” In response, a Democrat on the Senate Banking Committee has submitted legislation that would require banks to contact credit-reporting agencies when debts are satisfied. ...