The new laws stipulate that when a bankruptcy is discharged, you must send a """"reaffirmation"""" letter to any extant creditors that you intend to continue paying, informing them that you intend to continue making payments. This includes mortgage lenders and other creditors not enumerated in a bankruptcy filing.
In a 2005 case I am familiar with, this elderly couple was forced to file for bankruptcy. They actually filed during the transition period between the old and new laws. They had a bankruptcy attorney who, or so they believed, would take care of everything.
They obtained a used car loan from their credit union last year. They were astonished by how high their interest rate was, but reasoned that it was a result of their bankruptcy four years prior.
Importantly, despite the fact that the bankruptcy occurred four years ago, this couple has never been late on a mortgage payment and has consistently paid their mortgage throughout the course of the loan.
Not until they recently retrieved their credit reports did they realize that even though the mortgage company was listed, it appeared as if the mortgage was included in the bankruptcy. When I first heard this, my first query was, """"So, if you've been making payments for the past four years, but it's showing as discharged, where are those payments going?""""
I was perplexed, as were they, until I learned that a confirmation had to be sent. However, this is the true kicker. The confirmation HAD already been sent. The mortgage lender asserts that they never received it. Yeah...right. Regardless, they have been paying for this one issue for four years with no improvement in their credit score.
Therefore, why am I sharing this information with you? Because it is ESSENTIAL to comprehend what is reported or not reported and why. In addition, you cannot presume that the individuals you pay or request to carry out their duties will actually do so.
As consumers, it is our responsibility to educate ourselves about how credit functions. We need not be familiar with all regulations. However, we must know how to obtain and interpret credit reports from all three credit bureaus.""
" - https://www.affordablecebu.com/
