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Feds investigate banks over bankruptcy, credit reporting issues

A major national newspaper recently ran a story about consumer bankruptcy filings. The twist was that individuals didn't end up getting the debt relief they expected after filing for bankruptcy. We want to take a closer look at this story so that our Wayne County readers understand the details and why this has happened to some people.

The story cites a number of examples where people found that, even after completing the bankruptcy process, some debts still lingered on their credit reports. The only way to clear them up, individuals have been told at that point, is to pay them -- or risk tarnishing their credit reports. As our readers likely know, building up good credit scores after obtaining a fresh start through bankruptcy is a top priority.

Reports of this phenomenon have drawn the scrutiny of a number of federal agencies. Officials are concerned that some banks may be intentionally misreporting debts to credit bureaus that should have been discharged in bankruptcy, and then colluding with debt collection agencies going after the debts. Consumers end up paying on debts even when they're not legally obligated to do so, because they feel like they have no other choice.

The important thing Wayne County residents need to understand here is that there are other options. If a bank or a collection agency is trying to collect on a debt that was discharged in bankruptcy, a legal professional can help protect filers from such tactics. He or she can also review a bankruptcy filing to see if any debt (perhaps secured debt, as opposed to unsecured debt) was not discharged and does in fact need to be paid.

Source: New York Times, "Debts Canceled by Bankruptcy Still Mar Consumer Credit Scores," Jessica Silver-Greenberg, Nov. 12, 2014

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    Posted by MaryDecember 11, 2015

    "I am overwhelmed by your response to my call, even 10 years after my bankruptcy was discharged. You have more knowledge and expertise than I could have imagined. Because of you, my fears have been put to rest. For that, I'm so very grateful. Thank you many times over. "

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    Posted by ClientOctober 26, 2010

    "... I was extremely impressed with Charles' understanding of the bankruptcy laws to the extent that I felt certain that my best interests were always at the forefront. "

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    Posted by MarleneJanuary 8, 2014

    He helped me thru my 1st bankruptcy and now the second. I had no idea what to expect , but they kept me informed and answered all my questions. Mr. Schneider is the most experienced and knowledgeable lawyer I have ever met. If you have to file call this attorney first!

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