Expert: Regan Shinski - 1/27/2010

Question
QUESTION: Mr. Shinsky

I sold a home two years ago by short sale. The sale closed four days before I went to court and had my debts discharged under chapter 7 bankruptcy. My credit report list my mortage as being included in the bankruptcy. Why would nthis be since I had paid the mortgage and no debt with the bank to dishcharge?

Another question: I have a credit card that I opened two weeks after the bankruptcy. This card is still current and I am making payments on it -- yet this card shows up on my credit report as being discharged in the bankruptcy also.  I didn't have the card when I went to court for the bankruptcy so how can this be?  

Last question: I had another card that shows as being included in the bankruptcy yet there was no balance on the card. How can a debt be discharged under bankruptcy if there is no debt to discharge?   

Thanks for your help.

ANSWER: Scott:

It's going to be difficult for me to answer your questions with certainty because I haven't reviewed your documents.  However, I can say the following:

The house issue really depends on how your contract was written.  If there truly was no debt, it probably shouldn't have been included.  However, if there was any debt in the shortfall that you are contractually liable for or if you were going to be issued a 1099 for the shortfall, it was probably best it was in because you could have liability there.

On the new card, it doesn't make sense to me.  if it was opened after the discharge it shouldn't be in there.

On the zero balance card, if you listed the card in the bankruptcy, it can show up even with a zero debt.  The liability is with the card and you are discharging all potential adjustments or charges that can show up with this card.  It really depends on if you signed off on it in the bankruptcy papers as well.

If you think you want to adjust this, you have to contact your attorney to petition the court.

Good luck,
Regan

---------- FOLLOW-UP ----------

QUESTION: Thank you for your quick response.

The short sale agreement was to clear all debt to the bank. There is no balance left on the loan. This was/is clearly stated in our agreement, I did not have to file a 1099 and am not liable for the shortsale difference.  I did origanally the loan in my bankruptcy, specificly for the reaon that I did want to be liable for the shorfall.  Four days before bankruptcy court I sold the home and quickly made arrangements to have it taken off the list of debts --or at least i was told it was.  I guess my question is that if it somehow was not removed from the list of debts, yet I did in fact pay the debt before bankruptcy, I should be able to have it removed from saying as such on my credit report?



The new card doesn't make sense to me either. Again i was wondering if you had any idea why a card that was opened after bankruptcy discharge would be included in the bankruptcy also.

I understand now why the zero balance card is on there.  


Thanks


Answer
I would dispute the mortgage account directly with the credit bureaus.  Send the information from the closing that shows there was no debt.  It SHOULD be removed, but may take multiple attempts on your part.  Obviously, this does not change the bankruptcy paperwork but should clear the account from the bankruptcy column on your credit report.

I would also dispute the credit card as being included in the bankruptcy.  Like you, I'm a little at a loss on this one.  Perhaps you applied before the discharge?  I really haven't seen this before.  However, if you dispute it as not in the bankruptcy, in theory, they are to contact the creditor.  The creditor is to then see it was not included in the bankruptcy and correct it.

Good luck, I hope it works out for you.

Regan