In a move that will surely ease the woes of almost a million citizens around America, two of the country’s largest banks have finally decided to eliminate debts from credit reports within the next three months. The debts, although legally void once the banks went bankrupt, were a suffering for many causing all sorts of trouble for these banks’ creditors.
The presence of these question marks on credit reports have hindered not only the chances of people getting new loans, but also their job prospects since employers are always on the lookout for doubtful activity on the behalf of the job applicants.
What did the Court have to say?
The inability of Bank of America and JP Morgan Chase to eradicate debts from credit reports is a direct violation of federal law which states that once a borrower has removed a debt under bankruptcy, the concerned bank must update the credit report to show that the debt is no longer valid. Moreover, this inability has led to lawsuits filed against both the Bank of America and JP Morgan Chase, along with two other banks, Citigroup and Synchrony Financial. The lawsuit, filed in the Federal Bankruptcy Court in White Plains, suggested that the banks chose to ignore bankruptcy discharges on purpose, thereby undertaking a debt collection tactic that is ruthless in nature. According to the court’s hearing, this was pretty harsh as it sought to squeeze money out of people for debts that are not actually valid.
The accused banks, although not available for comment on this article, have, however, remained stubborn in their defense in the past. The banks stated that they have not violated federal law and have accurately updated all credit reports post-bankruptcy.
The stubborn nature of the banks and their ruthless tactics to hold credit reports hostage has meant that creditors have had no choice but to pay off debts they no longer owed. The desperation of the creditors can be attributed to the fact that having a sound credit report can be the difference between securing employment and staying jobless.