hello, I filed for chapter 13 bankruptcy in NJ in 2009 and have been making payments regularly. I'm trying to clean up my credit report. All my creditors have reported zero balances except one. This same creditor did file a claim with the court for the balance owed and has been receiving payments through the bankruptcy court through my payment plan. I asked the creditor to report the balance as zero and they refuse. They also indicate the account is charged off. What is the law with respect to report balances? Response 1: After you receive your Discharge Order, all debts discharged in bankruptcy must show the balance on the accounts as zero. If the balances do not show zero after your Discharge Order, you can then dispute the information with credit reporting bureaus. So, since you have not received your Discharge Order yet, there is nothing you can do about the this particular credit choosing not to report zero balance on the account. Also, can you report the account as charged off and then collect on the same debt through the bankruptcy court? It would appear that there would be an issue there with the IRS. Please advise. Response 2: Yes, a creditor can report the account as being charged off and still collect the same debt through your Chapter 13 plan. Charge-off means that the creditor has written off the account as bad debt for bookkeeping purposes. If and when the debt is recovered, the creditor would adjust its books including filing amended tax returns.
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