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Another reason to Check your credit report

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Zombie Debt. Another reason to Check your credit report

As credit.com recently reported, a new bill is being introduced to protect people who received a bankruptcy discharge. Every now and then an old debt that was discharged in the bankruptcy remains reported on the credit report. This can cause the cycle of “zombie debts.” These are debts that are not owed, but get revived again when a debt buyer buys the debt. The debt buyer goes through the process of trying to collect the debt again, even though the debtor has no liability.

Check your credit report to verify proper reporting

So you should check your credit report to make sure all debts in your bankruptcy are properly reported. The Debt should show a Zero balance ($0.00) and the status line should say “included in bankruptcy.” If the debt doesn’t say that, then it’s up to you to dispute the debt.

Disputing is relatively easy. But it can only be done when you check your credit report online. You go online to www.annualcreditreport.com and set up an account with all three major bureaus. Once you your reports are online, you click on the debt in question and then click on Dispute. A drop down box appears for the reason or the dispute. One of them is bankruptcy. Click on that. Within 30 days the bureau must investigate the dispute, and if you are right, and you should be, then it will reported as in bankruptcy.

Check your credit report for Zombie Debts

The problem with Zombie debts is that they are not being reported correctly. As the www.credit.com article “Is Your Credit Report a Mess Post-Bankruptcy? A New Bill Could Help” states, an inaccurately reported debt could cause the debt to be sold off to another company. The article notes that there is a dispute whether it is intentional or not, but obviously if the debt-seller has it reported wrong, it won’t get pulled at the sale because it APPEARS to be a valid debt. Then the onus falls on you as the former debt-owner to dispute it. Although we mentioned that disputing is easy, it is still a pain to have to do it.

This bill makes it easier for the discharged debt to be reported more accurately. And most importantly, provides some type of penalty against the creditor for failing to report it correctly.

Check your credit report after Discharge

This is why our office sends a letter upon discharge imploring you to check your credit report every year. It is to help you avoid the zombie debts and avoid misreported information. You especially need to check your credit report before making a major purchase like a house or a car. You need to ensure that your information is correct.

The law firm of Busby & Associates has helped thousands of people get debt free. When your case is done, your relationship with our firm does not end. If you have questions about your credit report or need more information about how to dispute a debt, we are here for you. Even if your case was completed five years ago.

Please visit our website for more information about us and bankruptcy. Call us today at (713) 974-1151 to schedule a no-obligation consultation or feel free to email us at [email protected]


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Michael Busby is a Houston divorce lawyer who has been in practice for over 20 years and appears daily in the Family Law Courts of Harris County and Fort Bend County Texas

Busby & Associates , have two Houston Offices, one in Chinatown, Houston Texas and another in Independent Heights, Houston, Texas. Michael Busby is Board Certified in Family law by the Texas Board of Legal Specialization.