(PRWEB) October 22, 2012
The nation is recovering from what some refer to as "The Great Recession" so it's no surprise that personal bankruptcy filings in 2008 increased from 934,009 to 1,477,426 in 2011. This year, bankruptcy filings are impressively down. However, requests for bankruptcy records are substantially up, which is why U.S. Records conducted a survey to better understand the reason for the increase. The survey conducted, started October 1, 2011 and went through October 1, 2012. The question in the survey simply asked the participants the reason for obtaining their bankruptcy records. The findings are as follows:
Buying or Refinancing a mortgage - 31%
Buying a new car - 2%
For a job - 7%
Collection agencies trying to collect on old bankrupt Credit Card Debt - 11%
Collection agencies trying to collect on bankrupt Medical Debt - 49%
This is good and also bad news, as it is an indication that the housing industry is starting to move again. However, after conducting an investigation, U.S. Records uncovered what seems to now be a popular and common business practice between the Original Creditor and Collection Agencies. It seems the Original Debtor is selling the discharged bankrupt debts to Collection Agencies for pennies on the dollar. The Collection Agencies buy debts in hopes the debtor is unable to locate the bankruptcy records to prove the account was discharged in a bankruptcy.
The Collection Agencies then report it to the Credit Bureaus as new debt at the original amount owed prior to the bankruptcy. With Collection Agencies buying old bankrupt debt, it is not only a violation of State and Federal laws, it also prevents the public from being able to qualify for a mortgage to purchase a home, in some cases get a job, and get loans for vehicles, until the issue is resolved. With that being said, it's no wonder why the economy is taking so long to rebound.
When the Collection Agency re-report's the old bankrupt debt on the credit report as new debt, the credit scores go down, in some cases by over 100 points. The Credit Bureaus then put the burden of proof on the debtor to show their bankruptcy records before the Credit Bureaus will remove it, and stop the collectors from trying to collect on the debt.
There is however, Free help, for the public trying to correct these mistakes on their Credit Reports. There is no need to pay a company hundreds of dollars, if the public is educated how to remedy the problem. It is also now, a good idea to keep bankruptcy records forever instead of the 7 years as previously instructed.
Federal Bankruptcy Records are now stored on a database, however, any bankruptcy case filed prior to 2003 are in a Federal Archive Center where they are kept for 25 years before they are disposed of. U.S. Records has requests for bankruptcy records that date back to the 1960's. If the records are to old and can't be located, the debtor might be stuck having to pay the debt depending on the statue of limitations law for the state in which the debtor resides.
It only takes a score of 620 (FHA Guidelines) and 680 (Conventional Guidelines), as long as it has been two years of being discharged from a bankruptcy. Not 10 years as most people think. So, it's very important credit files are reporting correct information.
Its also important to file a complaint with the Federal Trade Commission, as "one of the nation's largest consumer debt buyers has agreed to pay a $2.5 million civil penalty for providing information to credit reporting agencies, while knowing or having reasonable cause to believe that the information was inaccurate." The more complaints the Federal Trade Commission receives on the Collection agencies and Credit Bureaus that choose these bad business practices, the faster the public will no longer have to be burdened by their actions. It could also help the slumping economy as well. It does not matter how low the government lowers the interest rates for mortgage loans if no one can meet the qualifications.