Bank of America, Chase To Change Credit Reporting Practices For Discharged Debts

According to the New York Times, Bank of America and JPMorgan Chase will be fundamentally changing how they report debts that were discharged in bankruptcy. Within the next three months, BofA and Chase will update consumer credit reports to indicate when a debt has been discharged in bankruptcy--even if the debt was sold before it was discharged.

The move is related to a series of lawsuits filed in federal bankruptcy court in White Plains, NY. The suits allege that BofA, Chase, and other banks ignored bankruptcy discharges when selling debts to debt buyers.

BofA and Chase have agreed to properly report the discharges. BofA is going one step further. For any credit card debts sold since May 2007, it will completely remove negative marks from credit reports.

Only time will tell to see if they follow through.

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