Some Arkansas consumers who went through personal bankruptcy with good intentions to start over and avoid previous errors may have been disillusioned. State and federal officials recently reported that thousands of consumers who were promised the protection of bankruptcy and discharge of some debts remain to be persecuted by debt collectors. It was reported that many banks willfully fail to update credit reports after debts have been discharged.
It is said that banks know that post-bankruptcy consumers would be desperate to have those debts cleared off their credit reports, and that they will try to find a way to pay the debt that legally no longer exists. Once a bankruptcy ruling has voided a debt, credit reports should be updated to show that discharged debts are no longer past due. While consumers should be afforded the opportunity to rebuild a healthy credit record, they are often put under additional pressure to pay old amounts in order to obtain new credit or loans. Some consumers say they are even unable to find employment as a result of the false information on their credit reports.
An investigation was launched to determine which banks have been violating the bankruptcy laws in this way. The bankruptcy process involves intense financial analysis that scrutinizes every financial aspect of the applicant in order to obtain discharge injunctions. This is professed to grant a consumer a fresh start, and consumers are typically informed that obtaining credit and loans may be out of their reach for a few years.
Retaining the services of an experienced Arkansas bankruptcy attorney may help you to understand your rights. If you seek the guidance of such a professional as soon as you start to consider bankruptcy, a legal representative will be with you throughout the process, and situations as described above can be avoided. He or she will be familiar with your circumstances and know what issues may arise. A visit to our Arkansas bankruptcy website will provide more information on how we can improve your chances of obtaining a stable financial future.
Source: tampabay.com, “Debts canceled by bankruptcy still mar credit scores“, Nov. 21, 2014