published an interesting article about the sale of discharged debts. Many consumers do not know that banks
will sell debts that have been discharged in bankruptcy. After all, shouldn't
they be worthless?
However, many debt buying companies will pay for large bundles of discharged
debts and attempt to collect them. This practice denies consumers their
fresh start in bankruptcy. In particular, some debt buyers will give a
purchased debt a new account number and report it to credit bureaus. When
the consumer attempts to obtain a mortgage or vehicle loan, they often
find out that the re-reported debt is what is preventing them from getting credit.
Many are faced with a difficult choice--pay the discharged debt and obtain
the credit that they need, or hire an attorney and fight. The second option,
obviously, takes more time and can be costly.
That said, asserting and defending your legal rights is worthwhile. The
problem for many consumers is that they cannot wait for the legal process
to resolve. In the meantime, the damage is still being done by the inaccurate
Rather than re-report the Bloomberg article, I highly advise giving it a read.