You’ve finished your Chapter 13 and emerged from bankruptcy with your home loan current.
But your credit report is a blank page as to your mortgage.
The mortgage servicer isn’t reporting your payments to the credit reporting agencies [CRA’s].
Nothing. Nada. Crickets.
So, even though you’re making regular payments, you’re not visibly rebuilding your credit.
Ask the servicer and they’ll tell you that they can’t report your payments “because of your bankruptcy discharge“.
But they are wrong.
Mortgages aren’t discharged
In Chapter 13, your liability on your mortgage is an exception to the discharge.
The mortgage loan is not discharged as a personal obligation.
And therefore, there is no legal bar to the servicer reporting your payments, and every danger should they not report.
Here’s the part of the Bankruptcy Code that excludes long term debt like your mortgage.
Section 1328 says,
(a)… the court shall grant the debtor a discharge of all debts provided for by the plan …, except any debt—
(1) provided for under section 1322(b)(5);
Section 1322(b), defining the debts excepted from the discharge, says
(b)Subject to subsections (a) and (c) of this section, the plan may—
(5) … provide for the curing of any default within a reasonable time and maintenance of payments while the case is pending on any unsecured claim or secured claim on which the last payment is due after the date on which the final payment under the plan is due;
So, among the debts excepted from the Chapter 13 discharge is a secured claim with a payment schedule that extends beyond the life of the Chapter 13 plan.
Servicer’s obligation to report
Put simply, if a creditor reported to credit reporting agencies before the bankruptcy was filed, then there is an obligation to report after the bankruptcy.
The “furnisher”, the creditor who supplies information to the credit reporting agency, has an obligation to make the information on file fully accurate.
In contrast to an unsecured debt like a credit card, which should be reported as having a zero balance after the discharge, the mortgage loan after Chapter 13 has a balance.
Presumably, it is also current. Both facts which should appear on your credit report.
Get mortgage payments reported
If you find that your post discharge payments on your home loan aren’t being reported, challenge the accuracy of what is on your report about that loan with the credit reporting agency.
It is the CRA’s responsibility to see that information in your credit file is accurate. The CRA is supposed to ask the furnisher to reinvestigate the challenged tradeline.
The Consumer Financial Protection Bureau has a how-to, with a template letter, on how to dispute inaccurate information on your credit report.
Get the good information reported as part of your fresh start.
