In this May 9, 2012 file photo, a Visa credit card is tendered at the opening of the Superdry store in New York's Times Square. More than 35 percent of Americans have debts and unpaid bills that have been reported to collection agencies, according to a study released Tuesday, July 29, 2014, by the Urban Institute. (AP Photo/Richard Drew, File)
In this May 9, 2012 file photo, a Visa credit card is tendered at the opening of the Superdry store in New York's Times Square. More than 35 percent of Americans have debts and unpaid bills that have been reported to collection agencies, according to a study released Tuesday, July 29, 2014, by the Urban Institute. (AP Photo/Richard Drew, File)
In this May 9, 2012 file photo, a Visa credit card is tendered at the opening of the Superdry store in New York’s Times Square. More than 35 percent of Americans have debts and unpaid bills that have been reported to collection agencies, according to a study released Tuesday, July 29, 2014, by the Urban Institute. (AP Photo/Richard Drew, File)

(New York Times) – In the netherworld of consumer debt, there are zombies: bills that cannot be killed even by declaring personal bankruptcy.

Tens of thousands of Americans who went through bankruptcy are still haunted by debts long after — sometimes as long as a decade after — federal judges have extinguished the bills in court.

The problem, state and federal officials suspect, is that some of the nation’s biggest banks ignore bankruptcy court discharges, which render the debts void. Paying no heed to the courts, the banks keep the debts alive on credit reports, essentially forcing borrowers to make payments on bills that they do not legally owe.

The practice — a subtle but powerful tactic that effectively holds the credit report hostage until borrowers pay — potentially breathes new life into the pools of bad debt that are bought by financial firms.

READ MORE

Leave a comment

Your email address will not be published.

Yes, I would like to receive emails from Washington Informer Newspaper. Sign me up!


By submitting this form, you are consenting to receive marketing emails from: Washington Informer Newspaper, 3117 Martin Luther King Jr. Ave SE, Washington, DC, 20032, https://www.washingtoninformer.com. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact