“During the financial crisis, more than 50 million people saw their credit scores fall due to foreclosures and financial hardships. Many turned to bankruptcy, but are still haunted by debt on their credit report that they no longer owe” (Dubyak, 2015). A new law called the Consumer Reporting Fairness Act was newly announced. The purpose of this legislation is to change previous bankruptcy policy that allows previous paid or discharged debts to appear on citizens’ credit reports, widely referred to as “zombie debts” because of how they haunt these consumers. The Consumer Reporting Fairness Act would require that any of those debts are changed to a zero balance by banks and debt buyers on the credit report of any consumers that meet these conditions. The filing for bankruptcy would still remain on record for up to ten years, but once the debt is paid or discharged it is to be immediately removed from the file. If creditors fail to do so, legal action may be taken against them. “Every consumer should have a credit score that accurately reflects how creditworthy they are… When creditors fail to report that debt is no longer owed, they drive down consumers’ credit scores, costing consumers money and opportunities. The Consumer Reporting Fairness Act will help ensure that creditors fulfill their responsibility to provide correct and timely information about consumers’ credit” (Dubyak, 2015). The purpose of this new law is to help consumers get employed and obtain mortgage loans more easily.
#bankruptcy #consumerprotection #debtdischarge #creditscore#NewConsumerProtectionBill #NACBA #zombiedebts#ConsumerReportingFairnessAct
Dubyak, M., & Vadala, G. (15 Jul. 2015). “Brown Introduces Bill to Strengthen Credit Reporting Accuracy”. NACBA. Retrieved from Web 17 Jul. 2015.
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