Welcome to The Times in Plain English   Click to listen highlighted text! Welcome to The Times in Plain English

Relief for “Zombie” Debt

May 10, 2015
Plain English Version

ZombieIt is not easy or fun to declare bankruptcy. You have to spend money and time. You have to bear the stigma of telling the world you did not pay your creditors what you owe them. The debt often is the result of medical bills or the loss of a job.

The biggest insult is to go through bankruptcy and still have the debt appear on your credit report. It is called “zombie” debt.

When their credit was checked, and zombie debt appeared, victims lost chances for jobs and could not get loans. Victims of false credit reports sued the banks to get the debts removed. Two banks, and now others, have agreed to stop the practice.

Why did the banks continue to list the debts when bankruptcy had discharged them?

It is hard to believe how greedy banks can be.

The banks kept the debts on the books in order to sell the debt to collection agencies. The banks denied this, saying this practice made no sense since they no longer had a stake in settling the debts. However, they do make money by selling the debt.

The banks did not admit wrongdoing. They did say they would stop doing it. They will now note on credit reports when all debts were discharged.

Were the banks simply ignoring federal bankruptcy laws? The federal government is looking into it.

More than one million Americans will be helped by the agreement.

Source: The New York Times May 8, 2015

 

Print Friendly

In Brief

Selling Kids on Vegetables

How to get kids to eat vegetables? Marketing is the answer. You can call it tricks or just good ideas. Whatever works.

School lunchrooms are...

What Do You Call Yourself if Your Mother is White and Your Father is Black?

On the 2010 Census, President Barack Obama, identified himself as  “black.” But millions of Americans consider themselves “bi- or multi-racial.”  And their numbers are...

Mending Walls, By Robert Frost

Robert Frost (1874 – 1963) was a great American poet. Just before he died, he read his poetry at the inauguration of President John...

Pineapple on Pizza? The Global Debate

The President of Iceland started it. Last week he joked that pizza topped with pineapple should be outlawed. His remarks set off a debate...

Archives

test

Dictionary
  • dictionary
  • English Dictionary

Double click on any word on the page or type a word:

Powered by dictionarist.com
Click to listen highlighted text!