Filing for bankruptcy can be a hard decision to make. Once made, those who have declared, undergo intense scrutiny in hopes that their debt will be discharged. Once discharged, the debts are legally required to be removed from the declarer’s credit report.
Banks are not following the rules.
Some of the nation’s largest banks are currently under investigation by the United States Trustee Program, which is part of the Justice Department, for failing to remove discharged debts from credit reports. These banks are employing less than ethical tactics in order to collect money from voided debts. This practice is lucrative to not only the banks, but also debt-buyers which are more likely to buy debts, even discharged debts, which they will yield a return from.
Banks deny wrongdoing in court.
Currently, several of these large national banks are facing litigation, being accused of refusing to clear debts which were legally discharged in bankruptcy court. The banks claim they are compliant with current bankruptcy law and credit reporting procedures. They also claim they have no interest in collecting payments on bad-debts. They have moved to have the lawsuits thrown out, but have so far been unsuccessful.
The Judge presiding over the cases has claimed that the banks were purposely ignoring discharged debts in order to further their business interests. Court documents have confirmed these claims with bank correspondence to debt-buyers detailing the steps they take when receiving payment of discharged debts. There have even been recently revealed contracts between the banks and the buyers allowing for a certain percent of payments on voided debts to be kept by the banks.
Once the debt is discharged in bankruptcy court the borrowers are not legally obligated to repay anything on said debts. The practice is a subtle way the banks can continue to exert power over borrowers up to decades after the debt is discharged. If the banks are found guilty of violating federal bankruptcy laws, they could potentially be audited and heavily penalized. This is one of the best reasons to contact a bankruptcy lawyer. If you or someone you know has experienced these practices contact a bankruptcy lawyer in Las Vegas to find out what rights and recourse you have.