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Bankruptcy and credit reporting requirements in South Carolina

If someone files for Chapter 13 bankruptcy, they may not be able to immediately see their payment plan show up on their credit report. A woman in California filed for bankruptcy and successfully submitted a repayment plan in April of 2015. Repayment plans, which are required for Chapter 13 filings, outline how the debtor will pay off certain creditors in a three- to five-year period. Debts that are remaining are normally discharged.

After the woman submitted her payment plan and had it accepted, she expected that this would be reflected on her credit report. However, even after she requested that reporting agencies update her credit report, they did not do so. The woman sued the agencies under the Fair Credit Reporting Act.

The defendants in the suit moved to have it dismissed, and a federal judge granted the dismissal. According to the credit reporting agencies, the mere acceptance of a repayment plan did not mean that any of the debts owed by the woman would be discharged. While reporting agencies can append payment plan information, this is not a requirement.

There are a variety of benefits to filing for bankruptcy. In many cases, unpaid debt may be discharged, and if someone files for Chapter 13 bankruptcy, they may be able to stop foreclosure or prevent secured property from being repossessed. For people to be able to get the most out of their bankruptcy filing, they should pick the restructuring option that best fits their situation. A lawyer could explain the pros and cons of different types of bankruptcy and the differences between a Chapter 7 and Chapter 13 filing.

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The Huggins Law Firm, PA

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