A big victory for consumers, as the New York Times explained late last week:
Two of the nation’s biggest banks will finally put to rest the zombies of consumer debt — bills that are still alive on credit reports although legally eliminated in bankruptcy — potentially providing relief to more than a million Americans.
Bank of America and JPMorgan Chase have agreed to update borrowers’ credit reports within the next three months to reflect that the debts were extinguished.
The move is a victory for borrowers whose credit reports have been marred as a result of the reported debts, imperiling their job prospects and torpedoing their chances of getting new loans.
Why the change? The two banks (and several others) were sued for ignoring bankruptcy discharges so that they could sell off consumers’ debt and enable the debt buyers to make a profit because the consumers, facing marks against their credit score, had an incentive to pay off the debts even though they no longer legally owed them.
The Times estimates the changes could help more than one million Americans, who labor under erroneously marred credit reports. Citigroup, another of the defendants in the lawsuit, appeared poised to join its co-defendants in implementing this change, based on the comments of its lawyers.
Read the story here.
I posted this story yesterday from the New York Times. The problem with this is the banks admit ignoring the bankruptcy filings and selling the debt to JUNK DEBT BUYERS. The debts are now in the hands of criminal debt collectors who will claim the are an unrelated third party. The debt collectors will claim they have a right to collect the discharged debt from the bankruptcies. They do not have a right to collect. The banks are complicit in the crimes with knowledge. They sold the discharged debts knowing it was illegal to do so.
What about all the consumers who now have default judgments or summary judgments from the illegal bankruptcy debts? Will all of the judgments be reversed and overturned? Will the consumers who were damaged be made whole again? This is exactly the kind of organized crime that must be stopped.
The banks are playing games with consumers in making this announcement. The consumers will still be facing actions from criminal debt collection enterprises. The banks will claim they have no control over the JUNK DEBT BUYERS.
IT IS TIME FOR THE GOVERMENT TO STEP IN AND STOP ALL OF THIS ILLEGAL LITIGATION FOR BANKRUPTCY DEBT AND PAID IN FULL MORTGAGE NOTES MANY OF WHICH DERIVED OUT OF THE NATIONAL MORTGAGE SETTLEMENT AND THE INDEPENDENT FORECLOSURE REVIEW.
The nefarious actions by banks colluding with Debt collectors to extort money not owed goes on. This is not the end of the problems consumers face with these collections. Long after the banks clear their names from these bankruptcies consumers will be stuck in litigation attempting to clear their names.