What is the "correct" way,if any, under the law,for a discharged in bankruptcy debt to be reported to CRA's on the account of the secondary,joint,NON BANKRUPT party?
My husband had one joint account with his ex-wife, and he filed bankruptcy after they divorced. She didn't want to pay it and I believe it just reported as a charge-off, after they tried contacting her to collect on it. I think that it was even reporting as a charge-off before he filed bk, so I am sure it reported as such on hers. She was annoyed, but she also was doing CCCS so I am sure she had other issues out there--meaning I doubt the charge-off was the only adverse account she had, even though I don't think she understood that at the time. From our understanding, the credit card ceased collection from my husband when he filed BK and then turned efforts to collecting from her since she was jointly liable. It doesn't matter what the divorce decree states; if it's joint you are liable.
I understand the liability of a joint account holder.My question,however,has to do with the way a DISCHARGED in bankruptcy debt is reported on the NON BANKRUPT person's account. I have seen it reported as discharged in bankruptcy on a non bankrupt person's report.This is (I think) a violation of the FCRA,,as it can stay on for 10 years.
Only the BK Person's responsiblity was DISCHARGED, not the non-BK joint owner. Technically, it should not have any mention of the BK on the non-BK's history -- it would simply be delinquent with the appropriate data. The person is STILL liable -- it was a joint account -- the debt was NOT discharged from the non-BK person's liability. Even if it WAS reported as discharged in BK, it would NOT be a violation "because it can stay for 10 years" because it can NOT stay for 10 years. Only the CH 7 BK stays for ten years -- NOT the individual trade lines that were discharged. The trade lines are no different from any other delinquent tradelines -- 7 years from date of original delinquency (+/- 180 days - modified FCRA rules).
If, the creditor made no effort to collect from the nonbankrupt joint debtor,and the account is reported as an individual account,discharged in bankruptcy on his (the nonbankrupt's) account,is this a violation of the FCRA,and if so,where in the code can it be referenced.
I would think it would be a violation if it has been attempted to be disputed--like if the non-BK person has disputed the account as "I have never filed BK" or "incorrect info listed" and the creditor responds that this is correct/the CRA says it is verified, you could proceed with FCRA violations under the fact that the CRA and creditor are providing incorrect information, despite efforts to get it corrected. I don't know the FCRA sections well enough to give specifics, but I do know you have to go through the dispute process, give the CRA's 30 days and the like that is outlined in the letter section of creditnet. And if the items are still incorrectly reported after the 30 days, then yes, you could most definitely proceed with legal action. As much as you would like to, you just can't immediately file suit; you have to give them a chance to correct it. (I don't know from your post exactly what has transpired at this point, so I am just guessing there hasn't been any disputes as of yet) Hope that helps...maybe someone else can give you specific citations from the FCRA.
