What Is the Great Computer Myth on Credit Reporting?

worried couple sitting on a couch and looking at papers


By:Michael A. Cibik

We need to know all the debts you owe or might possibly owe in order to put a Bankruptcy case together. One mistake debtors often make as we get into deeper debt is to stop looking at the bills and notices. It’s stressful enough to have debt collectors calling, so we stop reading or keeping the bills and notices just to stay sane. If you can’t pay it, even opening the envelope hurts a bit.


But if you don’t read and keep the notices and bills, it is much harder for someone else to help you. Folks come in to see me and have no real idea who they owe now, how much, or what for. Often folks think it’s OK because there’s a record somewhere of everything they owe, like there is some Great Computer that has all this information in it, and the NSA is not letting bankruptcy lawyers get at it!


There are services that allow us to access your credit reports, with your consent.  And you can have free copies of your credit report each year too.  But your credit report is not going to help us very much in building your case for you.


However, some lenders do not report to credit bureaus. Some debt may be too old to appear on your report – but still be a debt you owe.  Some is just not the type of thing that pops up on credit reports – like a debt for damage to a neighbor’s car or money you owe a friend. Mistakes on credit reports happen a lot more than they want to admit.  A credit report will only tell us what some creditors, possibly yours, claim you owe them –not every creditor or potential creditor you could owe.


If you don’t list some of your debt in your case even by accident, it can be harmful to your financial health. In the simplest cases, it just means you have to spend more in attorney fees and court filing fees to fix the paperwork filed in your case.  But in extreme cases – particularly cases where some money is paid into the bankruptcy trustee’s hands from your assets or your payment plan – then the unlisted debts may not be wiped out at the end of a successful case


So even if it is physically painful to keep the bills and threatening notices from creditors, do it anyway. Don’t put your faith in the Great Mythic Computer to save you

Michael A. Cibik, Esquire

Michael A. Cibik is a partner at the Philadelphia law firm of Cibik & Cataldo, P.C. He is one of the few bankruptcy attorneys in the Philadelphia area certified by the American Bankruptcy Board.

If you or someone you know is having financial problems, stop worrying and call Michael at (215) 735-1060 for a free consultation.


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