The problem with that was, that unless the Debtor requested a reinvestigation, when they applied for credit years later, it still looked like they owed money to all these places. In fact, it looked like they had incurred new debt after the bankruptcy, and then not paid it, which I understand is even worse on your credit.

My firm has been doing a complimentary “credit clean-up” for clients for several years now, and it has worked rather well. We help our clients order a reinvestigation of credit from all the major credit bureaus, when each client receives a bankruptcy discharge. It requests that all the discharged debts show as a zero balance and that they were discharged in bankruptcy. I’m told it increases clients’ credit scores by anywhere from 25-150 points.

Anyway, for most people that go through bankruptcy, whose lawyer does not do a “credit clean-up” for them, having the old trade-lines still show up can be a major problem. It can keep them from getting credit, car loans, mortgages, all kinds of things.

Finally, someone brought a class action, and Terri White is one of the named plaintiffs.  The credit bureaus have agreed to fix your credit after bankruptcy now, apparently without being asked, and pay some money damages to certain consumers.

Who is covered? If you received a Chapter 7 discharge and your credit report was issued by one of the Defendants between March 15, 2002 and May 11, 2009 (or, for California residents in the case of TransUnion, between May 12, 2001 and May 11, 2009), and the credit report reported debts that were due and owing which were discharged in the bankruptcy.

If this is you, you may be due certain payments, from $20 to $750, depending upon if you can prove that you were denied a job, a mortgage, or other credit by reason of the erroneous credit report(s).

Should you take it? It’s a decision for you and your lawyer, if you have one. Of the $45 Million settlement, the lawyers for the class get $10 Million. Consumers split the remaining $35 Million.

For the official website that describes the settlement in detail, and provides a claim form, go to http://www.bankruptcydischargesettlement.com/.

For a web site that argues against the settlement, and suggests that you may want to object to it, go to http://stopthebankruptcydischargesettlement.com/.

Good luck!

Flowers at Moody Gardens, Galveston Texas

If your credit card debts are delinquent, backed up or behind, or about to get that way, and you think you may be able to pull things out WITHOUT filing bankruptcy, some of the major credit card banks just set up a website that may help you.

The new website is http://www.helpwithmycredit.org/index.php, and it appears to be a useful start at helping people who have credit card trouble. Of course in my opinion, the banks should have done this a long time ago, before the credit card delinquency rate was 10% like it is now, but I applaud them for doing it, anyway.

If you would, check it out and post a comment to tell me what you think of it, and whether it helped you or not.