Dear Bankruptcy Adviser,
I had my car loan reaffirmed as part of my bankruptcy discharge in October 2010. My attorneys told me doing that would result in my subsequent payments being reported to the credit agencies. Well, that is not the case. I looked up my credit report, and under this lender it says the account is closed. I have proof my payments are current. If they're not reporting my payments, does that mean I can drop the car off at the dealership and buy another? To be honest, I'm very upside down on the car, anyway. I'd almost rather they didn't agree to reaffirm the car.
Everything depends on whether you did or did not reaffirm the car loan.
A reaffirmation agreement is a legally enforceable contract, filed with the bankruptcy court. It states your promise to repay all or a portion of a debt that might otherwise have been subject to discharge in your bankruptcy. Some lenders demand you sign this agreement, and will not send you statements or report payments to the credit bureau, without the court-approved agreement. In many instances, lenders consider it a breach of the terms of your loan and will repossess the vehicle if you fail to sign the agreement.
When you do complete and file a reaffirmation agreement, the lender is obligated to report post-bankruptcy filing payments to the credit reporting organizations. You may need to contact the lender to make sure your payments are being reported.
The lender must be given an opportunity to correct what appears to be a mistake. Its internal processes to restart the reporting of post-filing car payments might need some work. You will need to keep in touch with the lender to ensure future payments are reported.
In the event that the lender refuses to report post-reaffirmation payments, you would have a claim against the lender for violation of the Fair Credit Reporting Act, or FCRA. In general, this act governs the proper reporting of information to your credit report. Failure to comply could result in a fine to the lender, a small award for damages to you (usually $1,000) and any attorney fees you incur.
Tom Martin, an attorney with Price Law Group who has handled numerous FCRA consumer claims, says: "The Fair Credit Reporting Act requires creditors to furnish complete and accurate credit information to the credit reporting agencies. If you have reaffirmed a debt and you are making timely payments to your creditor, the creditor has an obligation to accurately report your payment history to the credit bureaus. If they fail to do so, you are potentially entitled to recover statutory damages, as well as any actual damages you may have sustained as a result of diminished credit score."
You will have to make a request to the lender to properly report your post-filing car payments. At the same time, you will need to contact the credit bureaus directly to inform them of the lender's failure to properly report your payment history. Finally, you can consult with an attorney to discuss whether your FCRA rights have been violated.
You have a few options prior to hiring an attorney and making this a legal issue. You will need to explore those issues before bringing an action against the lender.