BK Discharged, Chase will not remove derogatory reporting

[Dieselsmoker]

So I had a home that was short sold in 12/2011, Chase had the 2nd mortgage on the property which had not been paid in over a year. The sale resulted in a $225,000 short payment to Chase. I filed BK Chapt. 7, 1/31/12 and was discharged 5/25/12. I got a copy of my report and it showed chase showing my account as 120 days late, charge off/ collection. I wrote Chase stating that they were reporting this incorrectly and got a response today:



We verified the information that we are reporting top the credit bureaus as correct. Your loan was 120 days past due starting 2/2010, and was paid off 12/20/2011. Therefore your loan was opened and closed prior to your bankruptcy filing on 1/31/2012 and this account cannot be included in your bankruptcy.

I was under the impression that if the creditor was listed in your schedule that the debt would be included in the bankruptcy discharge and that it cannot be reported as they are now. Am I wrong? Any ides, this is KILLING my score. Had I known this was going to happen I never would have filed.....

[Amy26]

Well, if the home was a short sale in December 2011 that is before your filing date. If the debt was cleared before you filed, then they are technically correct. So, if the loan was settled before you actually filed, then they cannot be included in your bankruptcy because there was no debt.

How much was the difference between the short sale amount and the loan amount? The only risk now, is that you may get a 1099 from Chase for the difference and have to pay taxes on it. I'm not sure how that works though since you actually did end up filing for BK. Typically, if you get a 1099 for a debt that was included in a bankruptcy you are not liable for it on your taxes... but this could be different since the short sale happened before you filed.

As for your credit, there are still ways to dispute this. I'm not an expert in disputing this sort of thing but you can probably find a way to get this off your credit report with the right kind of disputes and keeping at it.

[Dieselsmoker]

The difference was $225,000, so basically they could come back after me at anytime for the 225k had I not filed. So in reality I am not sure if the loan was actually settled per se, as there was still $225k that went unpaid.

[Amy26]

Well I would consult an attorney... cause I mean when a bank agrees to a short sale, they are agreeing to a lesser amount to satisfy the loan. That is the whole point of the short sale. They forgive you the deficiency amount and allow the property to be sold. As I said, because they forgive the debt then this technically becomes "income" and you may get a 1099 for it. But because all this happened prior to your bankruptcy ... in my opinion, I think Chase is right.

But I would definately consult an attorney and see what they say.

[IBroke]

I got a copy of my report and it showed chase showing my account as 120 days late, charge off/ collection. I wrote Chase stating that they were reporting this incorrectly and got a response today:

We verified the information that we are reporting top the credit bureaus as correct. Your loan was 120 days past due starting 2/2010, and was paid off 12/20/2011. Therefore your loan was opened and closed prior to your bankruptcy filing on 1/31/2012 and this account cannot be included in your bankruptcy.

It makes sense that the loan was not reported as IIB - BUT if the loan was paid off 12/20/2011, why are they reporting "120 days late, charge off/collection"? Shouldn't it be reported as "paid"?

[NoMoreCards]

You were 120 days past due prior to charge off, short sale or whatever, they can legally report that.

[IBroke]

You were 120 days past due prior to charge off, short sale or whatever, they can legally report that.

In the payment history - yes. But as current status?

After all, Chase is stating that the loan "was paid off 12/20/2011". The way they are reporting now would indicate to potential lenders that there is still money owed on the account.

If seen that in the past: Reportings of current status of xx days late and a current balance owed of $0. Although that's technically impossible, it happens over and over again.

[NoMoreCards]

In the payment history - yes. But as current status?

After all, Chase is stating that the loan "was paid off 12/20/2011". The way they are reporting now would indicate to potential lenders that there is still money owed on the account.

If seen that in the past: Reportings of current status of xx days late and a current balance owed of $0. Although that's technically impossible, it happens over and over again.

Showing current past due is not what I understood. It would be correct only in history.
The OP wasn't real clear either way.

[IBroke]

Showing current past due is not what I understood. It would be correct only in history.
The OP wasn't real clear either way.

The OP said

I got a copy of my report and it showed chase showing my account as 120 days late, charge off/ collection.

so I am under the impression that it is currently reported as 120 days late, charge off or collection. Each of these 3 options would indicate to other potential lenders that the OP might still owe something.
But it seems that we both agree that this "120 days late"-notation belongs into the payment-history and not into the current-status.

That's all that matters.

[reben]

Same thing happen to me with Wells fargo. Short sale closed in Sept 2009 and filed BK in Oct 2009. Disputed twice with no success. According to my attorney Wells is reporting correctly but they can not come after you for the difference. Wells Fargo report mine as:
Status: Paid in settlement. $99,991 written off.
Creditor's Statement: Account legally paid in full for less than full balance.
Account History:Charge Off as of Sep 2008, Aug 2008

It is not hurting my score much. When I rented the house in Dec my score was 673 and when I leased a car in June it was 702!!!! I was suprised to say the least.

[IBroke]

Same thing happen to me with Wells fargo. Short sale closed in Sept 2009 and filed BK in Oct 2009. Disputed twice with no success. According to my attorney Wells is reporting correctly but they can not come after you for the difference. Wells Fargo report mine as:
Status: Paid in settlement. $99,991 written off.
Creditor's Statement: Account legally paid in full for less than full balance.
Account History:Charge Off as of Sep 2008, Aug 2008

This is exactly how it should be reported. It leaves no doubt to anybody that you don't owe anything on that account any more.

[Dieselsmoker]

Here are some excerpts of my report, perhaps this will shed some light

TOTAL ACCOUNTS: 15 Add Experian and Equifax Reports NOW!
OPEN ACCOUNTS: 2
CLOSED ACCOUNTS: 13
DELINQUENT: 0
DEROGATORY: 5
BALANCES: 0
PAYMENTS: 0
PUBLIC RECORDS: 0
INQUIRIES (2 years): 16

[Dieselsmoker]

Here are the items that I am having issues with. ALL of these creditors were listed on my BK schedule...

ONEWEST BANK More about this account|Dispute -
- - - - -
- Account No.:
- Condition: Derogatory
- Balance: $0
- Type: Conventional real estate mortgage
- Pay Status: Late 120 Days


CHASE More about this account|Dispute -
- - - - -
- Account No.:
- Condition: Closed (Paid)
- Balance: $0
- Type: Credit Card
- Pay Status: Collection/Chargeoff

CHASE More about this account|Dispute -
- - - - -
- Account No.:
- Condition: Closed (Paid)
- Balance: $0
- Type: Flexible spending credit card
- Pay Status: Collection/Chargeoff

WFHE More about this account|Dispute -
- - - - -
- Account No.:
- Condition: Closed (Paid)
- Balance: $0
- Type: Home equity
- Pay Status: Collection/Chargeoff

[Amy26]

Where are you pulling your credit report from? You need to obtain paper copies of your report directly from the bureaus... this is the only way to know exactly what the trade line looks like. Different sites can display the information differently depending on how they interpret it. For example, some of my IIB accounts actually show up as charge offs when I pull my report from myprivacymatters.com but they really aren't listed as charge offs.

If they are indeed reporting that way you are going to have to fight this with the bureaus not Chase. You need to submit your dispute in writing and you may get mixed results... it may be a long fight but don't give up. If they are truly reporting incorrectly you may have to go as far as resistering a complaint with the BBB to get them taken care of. But if you haven't tried disputing with the bureaus, you should do that first. But don't do it online... disputing this sort of thing online is probably not a good idea. You'll want a paper trail. It may come back verified from the bureau, but if it does you can get them for that because they are verifying incorrect information and that is a violation. There is another really good forum that you can find some good sample letters and fighting methods on as well.

I'm still not clear on your whole included in BK/not included thing... but that may be irrelevant.

Hope that helps!