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     | Wednesday, August 23, 2000 - 08:18 am  If I get married, then my wife and I buy a house together, both being on the mortgage, then I later file personal bankruptcy, will her credit be harmed? I have had 3 attorneys give me 3 different answers as follows: Atty #1 - it could show up on her report due to human error but you could have it removed. Atty #2 - yes, it will be listed on her report showing the mortgage as "listed in bankruptcy" even though the mortgage wasn't written off. Atty #3 - said Atty #2 was absurd because loans don't have bankruptcy's, people do, so it will only show up on the report of the personal filing bankruptcy. What's the real scoop here?
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| | Wednesday, August 23, 2000 - 12:30 pm The mortgage lender might report "included in bankruptcy" while it was NOT included. You can dispute that. I've never seen "listed in bankruptcy" on a credit report and of course all debts HAVE to be listed in the bankruptcy filing, but that doesn't mean that they'll be "included" (discharged.) Atty #3 apparently doesn't realize that loans are DISCHARGED in bankruptcy and reported as such. See http://www.bayhouse.com/bkcreditdispute.html It's not at all a question of being married, it's a matter of who signs for the loans. But there could be "errors" showing up on her report. And then there's the issue of community property and debts, the laws vary by State and I know nothing about it. Don't get her (married or not) any credit cards for your accounts. I'd wait to get married if planning on filing for bankruptcy soon.
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| | Wednesday, August 23, 2000 - 02:17 pm I agree with atty #2, but there is no guarantee that this will happen. But if it does happen, I do not feel that it is a mistake, as atty #1 says. I also feel that there is no guarantee that, if it does happen, a dispute with remove it from a spouse's report. My understanding is that disputes technically, generally remove information which is inaccurate or non-verifiable. It would NOT be inaccurate to state that the account was included in a bankruptcy filing. I have always assumed that if a spouse's credit reports states "account involved in bk" then this hurts them. But can anyone verify this. Is there a reason code for this?
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| | Wednesday, August 23, 2000 - 03:51 pm I don't know of a specific reason code, it *could* be included in anything from late payments to serious delinquency. The account could also be completely ignored, as the bankruptcy public record already lowers the credit scores. I have no idea whether the number of included accounts has any impact. It is my understanding that the "included in bankruptcy" notation indicates that the account was discharged. Personally, if I was in the wife's situation, I'd sue if my dispute didn't work. Either they remove the bankruptcy notation or the balance is 0 and discharged. Just because THE LAW requires that all debts be listed in the bankruptcy filing, the loan itself is by no means adversly affected. If the cosigner chooses to be responsible for the loan and to continue to make timely payments, the creditor has no right to ruin the cosigner's credit rating. I think the reporting of the inclusion in the bankruptcy filing is in violation of the FCRA, as only balances, payments and histories are to be reported. The filing has absolutely NOTHING to do with this individual account. It is not the job of the creditor to report the debtor's business, especially not on someone else's report. Just like they don't report WITH THE ACCOUNT when you get a new job, phone number, get married, divorced, etc. While that info is in the credit file, so is the bankruptcy filing -- separate from the account data. The actual DISCHARGE of the ACCOUNT is then reported on the credit report WITH the account. That's my opinion. Aside from the impact on credit scoring, I just wouldn't want that on my report. There STILL are occasionally real people reviewing credit reports, such as landlords, apartment managers, business associates, etc.
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| | Wednesday, August 23, 2000 - 04:31 pm The loan would likely show as "INCLUDED IN BANKRUPTCY" but the overall effect on the copayor's credit is unknown. I would not be confident in disputes purging the information from the co-borrower's credit profile.
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| | Wednesday, August 23, 2000 - 05:43 pm You could be right, but I still say reporting the loan as "included in bankruptcy" when it is not IS a violation of the FCRA. Expand this question to what if a borrower decides to go to the CCCS and ends up with the "counseling" notation that KILLS your credit scores. The cosigner doesn't have the right to pay the loan to keep his excellent credit rating? The cosigner's credit will be destroyed even if the loan is "paid as agreed?" Is there an FTC opinion letter on it?
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