How Do Creditors Report a Chapter 7 Bankruptcy Filing
When filing Chapter 7 bankruptcy, debtors frequently receive a discharge, only to find that they cannot open a bank account due to check reporting companies such as Chex Systems, Telecheck, and SCAN. All these companies are considered consumer reporting agencies, and similar to Equifax, Experian, and Trans Union. Nevertheless, they only provide deposit account verification services such as the reporting of bounced checks, to financial institution members. Such information is meant to aid the subscribing institutions in identifying account applicants who may have a history of account mishandling, for example, people whose accounts were overdrawn and then closed by their bank. After Bankruptcy, Chex Systems is not required to remove an accurate report previously submitted. Nevertheless, the reporting banks and numbers are obligated to update their reports with accurate information. Just like a member is obligated to update its reports with the paid in full or settled in full when applicable, a similar updating is required for bankruptcy filing discharges.
Establishing bank accounts after bankruptcy is a relatively easy task. Opening a savings account will not require the bank or credit union to obtain a credit report since you are not making a request for borrowed funds. Should you wish to open a checking account or other transaction account, many financial institutions will obtain a report from one of the agencies that maintain databases of negative information regarding NSF checks or other problems that people have encountered managing checking accounts. Nonpayment of fees, third-party NSF checks consistently included in deposits or other recorded problems one has had managing such an account. While chapter 7 bankruptcy information should not normally appear in the database, if there were circumstances that may have caused problems with your previous checking account, you may need to explain the situation before you’ll be allowed to open the account.
