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If a borrower files a Chapter 7 bankruptcy and reaffirms their loan debt with us, should we report subsequent loan payments to the credit bureaus? If the borrower continues to pay without reaffirmation, should we report only that the loan was discharged in bankruptcy, but not report the payments made? – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

If a borrower files a Chapter 7 bankruptcy and reaffirms their loan debt with us, should we report subsequent loan payments to the credit bureaus? If the borrower continues to pay without reaffirmation, should we report only that the loan was discharged in bankruptcy, but not report the payments made?

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Yes, if you receive notice that the debt has been discharged in bankruptcy, we believe you should report it so that the consumer reporting agency can accurately note the status of the debt (e.g., discharged, voluntarily repaid, etc.). It also would make sense to report a reaffirmation and to report loan payments that the borrower makes after discharge (with or without a reaffirmation).  

For resources related to our guidance, please see:

  • IBA Compliance Question 2014-098 (“How should we report consumer real estate loan payments that have not been paid after the customer has filed for bankruptcy? We have been reporting the loan as “past due” to the credit bureau, is this correct?”)
  • The Fair Credit Reporting Act, 15 U.S.C. 1681s-2(a)(1)(A) (“A person shall not furnish any information relating to a consumer to any consumer reporting agency if the person knows or has reasonable cause to believe that the information is inaccurate.”)