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As a person who regularly checks his credit report, I was surprised a few years ago when one of the credit bureaus reported that I had filed for bankruptcy.  This was not true; I was only eighteen or nineteen at the time, and had no reason to file.  It was actually a family member of mine who had filed for bankruptcy.  Adding to the absurdity of the situation was that the bankruptcy had been filed in 1995, when I was only 7 years old.  Despite the inherent nonsense, I still had trouble convincing the representative of the credit bureau over the phone that the bankruptcy did not actually belong to me.  I eventually got the situation resolved, but it took a lot of needless time.
Of course, that was not the only account listed on my credit report that did not actually belong to me.  There were multiple other accounts past due which were incorrectly attributed to me on my credit report.  I believe I have had incorrect listings on my credit report every time that I have checked it, including earlier this year.  Based on the way that credit reports are currently structured, it seems to me that the system runs contrary to its stated goals.
First, I should mention that the only website that will give you an actual free credit report every year is AnnualCreditReport.com.  It will give you your reports for Equifax, Experian, and Transunion.  I find it troubling how few people are aware of this; television, of course, is littered with commercials for websites with misleading names about the prices of their credit reports, which lead to monthly account charges. AnnualCreditReport.com is mandated to exist as a consequence of 2003’s Fair Credit Reporting Act, and will provide anyone with a truly free credit report once every year.
The goal of credit reports, as I understand it to be, is to provide information on the worthiness of a customer to receive credit.  Some aspects of the credit report adequately serve this function: if I were considering lending money to a consumer, I would certainly like to know whether that consumer has recently defaulted on loans, has filed for bankruptcy, or has substantially more debt than income.
My main problem, though, is that a consumer’s credit score lowers when the consumer has his or her credit checked, whether that is by the consumer or by a potential lender.  This, to me, should be changed.  Whereas things like bankruptcy and past due accounts generally show a degree of financial mismanagement, frequent checking of one’s credit is indicative of diligent awareness of one’s creditworthiness.  Even beyond this, people in my situation, with incorrect information constantly showing up on my credit report, have somewhat of a “damned if you do, damned if you don’t” scenario.  If I fail to check my credit report frequently, then incorrect information shows up and I don’t have the chance to correct it until I have already been denied credit due to the faulty information.  If I do check my credit report frequently, my credit score will consequently decrease, and I will similarly have a difficult time obtaining credit.  I am aware that there are services available which alert consumers about changes to their credit reports, but I have trouble believing that every consumer should have to pay a monthly fee to utilize such a service, considering the mandatory nature of having reports with the three major credit bureaus for any consumer who wishes to obtain credit.
If that aspect of the credit system does not change (or even if it does), then new procedures need to be put in place to ensure that information on credit reports is actually correct.  For example, for any information that appears on my credit report, if either the creditors or the bureaus had bothered to verify that my social security number matched that of the delinquent debtor, they would have discovered quickly that the accounts did not actually belong to me.  Instead, however, many of these creditors see a similar name and/ or the same address, they incorrectly report the debt to the credit bureau without any further verification.  A mandatory social security number verification, by either the credit bureau or the creditor, would easily resolve this situation.
When incorrect information does appear on a consumer’s credit report, the consumer’s remedy is to submit a dispute to the credit bureau.  The credit bureau will then contact the creditor and ask them to verify that the information is correct.  If the creditor fails to report back to the bureau with affirmation that the information is indeed correct, then the credit bureau is legally required to remove the information.  This system is not perfect either, however.  With at least one account that has incorrectly been reported as mine on my credit report, I disputed the account, and the company STILL reported incorrectly that I was past due on an account with them.  When the credit bureau contacted the company, the company was lazy enough to report back to the credit bureau that I actually did owe them money, clearly without adequate verification.  I eventually got in contact with this company and asked why they still reported that I owe them money, even after the dispute gave them reason to believe that the information was faulty.  Their response was that they get hundreds of those every day, and sometimes these things just slip through.  I dislike a mandatory credit system that allows for corporate laziness to harm consumers in such a way.
My solution is for Congress to act on this and either put more stringent requirements to verify credit information or to remove the disincentive to check one’s credit report frequently.  The system, as is currently is, produces bizarre results and incentives that often do not reflect creditworthiness, but instead harm consumers for forces beyond their control.  Unfortunately, this is not a talking point that receives much attention in the media, so I am not confident that such changes are imminent.
Please let me know what you think.  Unlike my previous blog entries, this one is largely based on opinion, and I am curious to see whether other have similar gripes.  Also, you may have noticed that I said I said in my last entry that I would write about the discharge of medical malpractice debts.  I felt more motivated to write about this at the moment.  I’ll probably write about that at some point.  I plan on writing every other week from this point, and I am not sure at the moment what my next entry will be. Please come back here in a couple weeks and find out. Thanks for reading.
J.P. Morgan

Thursday, June 28th, 2012 the Supreme Court decided it was constitutional to mandate health insurance.  This blog is not about my opinion – rather it’s what this decision can avoid.  So many people have had to file bankruptcy, Chapter 7 to get rid of their unsecured debt, and/or Chapter 13 to ultimately save their home because they could not afford to pay their medical expenses.  Devastating illness for many families has resulted in devastating bills.  It truly is heartbreaking to see folks who have worked hard all their lives and consequently had to file bankruptcy to get out from under the stacks of bills they incurred while fighting to get well.  Overwhelming debt puts a huge burden on any family and it’s especially difficult for the ‘patient’.  The guilt, responsibility and fear the ‘patient’ feels as a result of his/her illness is truly painful to witness.
I’m still a flower child at heart and frankly I really hate for our government to tell me what to do.  I promised this blog was not going to be about my political preferences, however, I can’t deny how long I resisted wearing my seatbelt just because it was the law.  Well, I’m older and hopefully a bit wiser and I for one truly hope this new law  eliminates people having to file bankruptcy because of their medical bills.  Fighting to get and stay well is hard enough.  Isn't that the point??

A great number of us use our bank for everything: paychecks are on direct deposit; pay credit cards, mortgage payments and utilities bills electronically.  Some bills are setup for automatic payment and others are scheduled manually.  We are familiar with on-line banking;  an understanding of how our bank’s online software works and have mastered its applications. The thought of changing how we use our bank account or worse the thought of actually changing banks is an enormous pain.  Sometimes, in preparing to file your bankruptcy it is often necessary.
Cash on hand and cash in the bank is often non-exempt (not excused).  In limited circumstances when exempt it will be for a limited amount of money claimed on your bankruptcy schedules.  In a Chapter 7 case, any excess cash (the difference between what's in the bank and the exemption amount) will end up in the hands of the Chapter 7 Trustee unless you can amend your bankruptcy schedules to claim the additional amount as exempt (excused), which often is not the case.  In a Chapter 13 case, the amount of non-exempt cash in the bank may increase your Chapter 13 monthly payments. 
The amount of cash in banks gets listed on your bankruptcy schedules at the time your bankruptcy is filed, without considering outstanding checks or incoming paychecks, social security checks or the like.  Therefore, it is important all outstanding checks have cleared the bank before your Bankruptcy case is filed. It's routine to adjust the amount listed on your bankruptcy schedules before your case is filed.
Well the foregoing is tough enough to keep straight, what's worse is having to change banks.  Opening a new account at a different bank and having to learn the new bank’s system, redirect your automatic deposits and set up automatic payments is without question time consuming   and disruptive.  The two situations that require a person about to file bankruptcy to change banks are: 1. If you owe your bank money (for example: an automobile loan, furniture loan, etc.).  If that's the case, there is every reason to believe your bank will grab the money in your account and apply it to the debt leaving a person with checks bouncing and no money to pay ordinary living expenses.  2.  Depends on a particular bank’s policy when one of it's customers files bankruptcy.  There are banks that will freeze your account when they discover  you have filed bankruptcy, which leads to checks bouncing and bank service charges for each NSF check.  Assuming you are entitled to keep the cash, some banks take up to 10 working days to free up your account. 
 

A Chapter 13 Bankruptcy can last anywhere fromm 36 to 60 months.  Three to five years is a considerable amount of time and a lot of things can change.  There are a number of issues that may affect your bankruptcy.  Some of the most common changes that need to be addressed are:1. Change in Income.  Over the course of your bankruptcy you may find that you change jobs, become employed when you previously were not, or get a promotion or pay raise.  Any change in income should be reported to your attorney, regardless of whether it is a pay increase or decrease.  You attorney may advise that you need to amend certain schedules and/or amend your Chapter 13 repayment plan. 2. A need to replace a vehicle arises.  Your vehicle may break down, or perhaps it is just time to replace your current vehicle.  If possible you should speak with your attorney before a new vehicle is an absolute necessity.  The steps your attorney will need to take depend on the situation.  If you are purchasing a new vehicle outright, free and clear of loans, you may need to explain where the funds for the vehicle came from.  If you want to purchase a vehicle with a loan your attorney will need to file a motion to incur debt.  You will have to show that you can afford your plan payment and the vehicle.  A motion has to be filed with the court and you must allow at least 21 days for objections.  If there are not any objections your attorney will file an order with the court allowing the purchase of a vehicle.  If your previous vehcile was being paid through your chapter 13 repayment plan you and your attorney may need to amend your plan to reflect the changes.3. If you become entitled to receive a lump sum of money or property.  You could become entitled to receive money for a variety of reasons, including an inheritance, proceeds from a lawsuit or settlement, cashing out a 401k.  This list is not all inclusive.  If you receive a sum of money for ANY reason you should contact your attorney.  Generally, if you receive a sum of money while in a Chapter 13 that will have to be turned over to the trustee to be distributed to your creditors.  Generally, this will be added to your plan base and may mean that you are paying off more of your creditors.This is not an all inclusive list.  If something changes while you are in a bankruptcy you should contact your attorney.  If you have questions, or would like to schedule a consultation, please contact a St. Louis Bankruptcy Attorney Today.