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Credit Card Applications » News » Other » Bankruptcies and False Credit Reports

Bankruptcies and False Credit Reports

August 08, 2009
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The severe economic slowdown is forcing an increasing number of Americans to opt for bankruptcy to avoid paying debts. While not a sure way of getting out of debt, bankruptcy can protect consumers from lenders and creditors.

There are two kinds of bankruptcies. The first one, called a chapter 7 bankruptcy, releases the consumer from some or all of his or her debts. It essentially gives the cardholder a fresh start to re-establish credit and have a new lease on their financial life. The other kind, a chapter 13 bankruptcy, also offers protection for consumers. However, this particular protection only gives individuals another chance to settle debts on terms that are more manageable.

Approved chapter 7 bankruptcies mean that a consumer can regain a better credit standing because they are discharged from their debts. The final order of a bankruptcy court judge may include discharging several or all accounts with balances. This means that the accounts' balances should return to zero. When this happens, the cardholder's credit standing and scores should improve. Credit reports should also be free of any derogatory or unsatisfactory remarks connected to discharged accounts or unpaid balances. With these entries removed, consumers can expect their credit scores to improve significantly.

However, if these entries still appear in credit reports, cardholders have the right to dispute them. Even if the bankruptcy court has ordered that any outstanding balances be removed, some credit card companies and bureaus would continue to report balances. If the financial institutions in question do not alter the cardholder's records as mandated by law, then the complainants can take the matter to court and file a lawsuit for damages under federal law.

In order to ensure that credit bureaus and card companies comply with the law, consumers have to constantly monitor their credit records. One way to do this would be to ask for their credit reports from any of the three credit bureaus. These reports contain everything related to a cardholder's credit purchases and spending habits. They also contain changes to the consumer's credit records. Any discharged accounts should have the notation "included in bankruptcy." If they do not, then cardholders have the right to contest and dispute the matter.

Consumers can then send a formal dispute letter to the credit bureaus containing their complaints, and any proof or evidence. Cardholders must also include the bankruptcy court case number and the specific accounts and account numbers ordered discharged. If the credit agencies do not act on the request within the allotted time, or if the bureaus refuse to correct the errors, then cardholders can consider contacting a consumer protection attorney for assistance.

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  • Larry
    With the Virgin / Barclaycard signature offer, there seems to be some consumer deception or maybe even outright fraud goin on.   I decided to jump on this offer..  read all the info on it..  was approved for their platinum card, paid the fee, then was only awarded 10,000 points instead of the advertised 20,000.   When i inquired about the less than advertised bonus points, Barclaycard claims only Signiture Visa cardmembers get the 20,000..  as a platinum cardholder, you don't qualify for that level of bonus, so you get 10k instead.   Well, in their current ongoing promotions, it states plain as day that....    Applicants approved for the Visa Signature or Platinum Card with $49 annual fee will receive 20,000 Bonus Points awarded to your Virgin America Rewards Account at the close of the first billing statement in which you make your first purchase or balance transfer (that is not returned or rescinded) and have paid the Annual Fee on the account (and such fee is not rescinded). They don't mention anything about a separate program for platinum cardholders..  However, trying to get someone to resolve this issue with either Virgin or Barclaycard seems to be rather impossible.. Seems to me they're simply drawing people in with the fraudulent offer, then simply saying, oh, we're sorry you don't qualify..  but thanks for signing up for our garbage credit card with insane fees..   
  • CreditLandCom
    Thank you for sharing your experience with us. We have reviewed this offer and you are correct, nowhere it is mentioned that 20,000 Bonus can become a 10,000 Bonus all of a sudden... We will mention this in our review of this card so others can make an informed decision. Another way to get Virgin miles is to get an American Express charge card: The Business Gold Rewards Card® now offers 50,000 Miles, though you do have to spend $5,000 in the first three months of card membership to get it. It also has $0 introductory annual fee for the first year, then $175. http://www.credit-land.com/details/the-business-gold-rewards-card-from-american-express-open.php Premier Rewards Gold Card now offers 25,000 Miles, though you do have to spend $2,000 during your first three months of Card membership. It also has annual fee of $0 for the first year, then $175. http://www.credit-land.com/details/american-express-premier-rewards-gold-card.php While we do not know If any of these offers make sense to you, we are at least sure that you will get advertised bonus in full if you decide to get them... Conversion rates for Virgin America are: 100 Elevate Points = 200 Membership Rewards® Points All the best.
  • Deborah Ellsworth
     would very much like to start a new credit history  by making payments on time I would tohave a credit card that is NOT PREPAYID! I don't need a card with a high limit just something to start a new credit history. Thank You Deborah Ellsworth
  • Deborah Ellsworth
    I would very much like to start a new credit line to get back on track. I DO NOT WANT A PREPAID CARD!! This new credit card if I am approved does not have to hace a high limit just something for me to start over again and prove myself ThankYou. D Ellsworth
  • Miss Edna
    there is a huge problem with the RFIP chip: it is easily compromised. There are already 'readers' in the form of what looks like a cellphone in a case, that scans all the info in the chip by merely walking near a person -- this 'reader' penetrates leather, cloth, spandex, etc. The only thing it will NOT penetrate is METAL. Perhaps one has seen commercials touting metal credit card cases. Here is my hint for a free fix: cut a piece of aluminum foil or use the foil that is used to keep foods fresh, like coffee. Cut it so that when folded once, it forms a sleeve for your credit card. place the credit card in the sleeve, then place the sleeve in your wallet.
  • Robin Parks
    I am looking to apply for the AARP Visa signature card from Chase that offers $100 after spend $500 in first 3 months, no annual fee and 0% interest first year; I don't want to mail in offer because of having to write in Social security #. Can you direct me to the proper on-line site?
  • CreditLandCom
    The Chase bank cards are not currently available at Credit-Land.com, but you can consider applying for the Citi® Dividend Platinum Select® Visa® Card - $100 Cash Back. The cards has similar terms and cash back program.
  • Becky
    This is Becky Now what do I do just waqit for acard to come to me?
  • CreditLandCom
    Once you have applied, you should receive a letter within 10 business days letting you know if you were approved and when your card will arrive. If you did not receive any letter or notification from the issuer, you should contact them directly. Also, you should contact the issuer if you’ve been waiting for your credit card longer than 30 days. Since we are not a bank and don’t issue credit cards, we cannot give you any information about your application or credit card.
  • SavingStar
    Thank you for posting about SavingStar. Just to clarify one sentence in your article, we have over 5 million members (not 500). Thanks, Josh
  • CreditLandCom
    Sorry for the misprint. We’ve corrected the sentence. Thank you for noticing that.
  • Eric
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