ATTENTION: Have you filed for bancrupcy lately?

Court Mandates Credit File Cleanup 

A recent court decision requires the three major credit-reporting bureaus — Experian Group Ltd., Equifax Inc., and TransUnion LLC — to clean up the credit files of consumers who have filed for Chapter 7 bankruptcy.

These bureaus are still reporting old debts as active on consumers’ credit reports even though they were wiped clean in a bankruptcy filing.

The U.S. District Court for the Central District of California gave the bureaus until Oct. 1 to revamp their systems. 

Consumers who have gone through Chapter 7 bankruptcy should request copies of their credit reports at a website like AnnualCreditReport.com and make sure that the old debuts have been removed.

The court-mandated changes come at a time when more consumers are filing for bankruptcy amid rising loan defaults and tighter credit standards. U.S. consumer bankruptcy filings jumped 29.2 percent to 96,413 in August, according to the American Bankruptcy Institute.

Source: The Wall Street Journal, Jane J. Kim (09/30/2008)