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Class-action lawsuit results in more accurate credit reports

New Jersey residents may be relieved to know that, thanks to a class action lawsuit, which began as multiple lawsuits between 2005 and 2006, credit reports now more accurately show the debts that have been discharged through bankruptcy. According to the case, three of the major credit bureaus, Equifax, TransUnion, and Experian, showed that some consumers, though provided debt relief through filing for bankruptcy, were still reflected as being delinquent in making payments on their credit reports.

According to some plaintiffs, the companies, even after being made aware of the errors, did not investigate them. Although the financial settlement was thrown out in April, improved reporting procedures went into effect as a result of the case back in 2008.

It should be noted that even though debts may be discharged after a bankruptcy, a person’s slate won’t immediately be wiped clean. The negative effects of a bankruptcy can remain on one’s credit report for years. According to an expert witness for plaintiffs in the case, however, should debts still be incorrectly reflected as due and payable, it can leave one’s credit score lower than it should be, which may make it difficult to bring it back up.

Individuals who are struggling with debt may be unsure of where to turn for relief and may fear the consequences of filing for bankruptcy. Discussing options with a New Jersey bankruptcy lawyer may prove to be beneficial as they may be able to arrange repayment plans, assist in liquidating assets or reorganize finances.

Source: New York Times, “Credit Reports More Accurately Reflect Debts Discharged in Bankruptcy“, ANN CARRNS, April 30, 2013

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