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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 118789
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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My husband and I had a chapter 7 bankruptcy back in '98

Customer Question

My husband and I had a chapter 7 bankruptcy back in '98 which was discharged--basically because he has Crohn's Disease and was in and out of the hospital and in order to keep the house and car, we had to discharge some credit cards. We have since paid all our bills and have stellar credit. I applied for a CITI diamond preferred credit card and was denied, according to the letter I received from them because I filed for bankdruptcy and my previous account was included in that filing. They then cited on the letter their credit decision was based in whole or in part on information obtained in a report from Equifax. They gave me the address and phone number to obtain same. I obtained a copy and no where does it state a bankruptcy nor does there state anything in public records as a bankruptcy would appear. It is also my knowledge that a bankruptcy is only on record for 10 years. I did call Equifax just to make sure they did not have any internal credit report and the company stated they did not and were surprised to hear that CITI stated they received the bankruptcy info from Equifax. I called back CITI and spoke with a manager who stated that in their files they kept, I had declared bankruptcy back in '98 and my Gold Card was included and that was the basis of their decision. I then pointed out to her that their letter was erroneous in that they stated they used info from Equifax when there is nothing showing a bankruptcy on Equifax--she looked this up again and did stated I was correct--Equifax did not show anything and that they should not have stated they used this as part of their basis.
My question is two-fold: a) If the bankruptcy was discharged in '98, can the store still hold this against me and for how many years or will this be forever; b) because of the erroneous info on the letter which caused me much distress last night and all morning--do I have a case against them?
Submitted: 1 year ago.
Category: Legal
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Did you have a previous credit card with Citi that was included in the bankruptcy from 1998?
Customer: replied 1 year ago.
a Gold Card.
Expert:  Law Educator, Esq. replied 1 year ago.
Thank you for your reply.
As the granting of credit is not a right, but sole discretion of the credit card company, if there was a previous discharge of debt with the company in bankruptcy or otherwise, they do not have to ever extend credit to that person again. The problem is there is no law that forces them to extend credit and the fact they have first hand knowledge of the bankruptcy (even though they may have stated incorrect facts on your denial letter about where they obtained the information about the BK) they do not have to extend credit based on the fact that they had to lose the money due previously on the Gold card.
So, legally, even with the mistakes in the letter, you do not have legal recourse against Citi for denying credit to you again. However, since there is no record on your credit reports, you would be able to apply to other companies if Citi does not want your business, but that is all you can do legally.