Reader mail: Nelnet reporting "included in bankruptcy" despite payments

A reader wrote:

I have been reading your posts over the last few days and found that many people have had problems with Nelnet. I was hoping you could direct me in the right direction since you have already gone through this.

I declared bankruptcy in 2001 and included all my debts (including Nelnet) not knowing that student loans could not be discharged. Since then, my credit has gotten much better. However, It has been 9 years since my bankruptcy was discharged and Nelnet continues to report my student loans as “Included in Bankruptcy.”

I have had the negative remarks removed at least 15 times over the years (by disputing via the CRAs), but each time Nelnet reports my account, the negative comments reappear. I have talked to Nelnet various times, but they seem to be complete idiots and make no changes.

It was my understanding that they couldn’t report this negative information if it was more than 7 years old. Also, my student loan is not quite paid yet and I have never been late on a payment.

Any help is greatly appreciated.

VERY IMPORTANT clarification:

“It was my understanding that they couldn’t report this negative information if it was more than 7 years old. Also, my student loan is not quite paid yet and I have never been late on a payment.”

If an account is NOT discharged but paid, it should NOT be reported as included in a Ch. 7 bankruptcy.

While your FICO scores can be OVER 700 just two years after a Ch. 7 bankruptcy filing, an account incorrectly reported as included and with a RECENT date because you are making PAYMENTS can lower your FICO scores by 80 points.

For new readers, I sued Nelnet in 2003 because they had reported INCORRECT late payments despite my timely monthly payments.  Since I had NO litigation experience, it took well over a year until I finally conducted discovery and found out that when I disputed with the credit bureaus, DIFFERENT Nelnet employees handled the disputes and some employees corrected, but one employee did not.  That’s why you often get different results after submitting identical disputes to the three credit bureaus.

It was interesting to review the Nelnet account history (received through the discovery process) INCLUDING all the notations regarding the disputes and clearly establishing that I was NOT late.

So they had continued to report the totally bogus late payments to one bureau and after they realized how they screwed up, we settled.  I think I settled with a confidentiality agreement, so I can’t provide details.

It happens quite a bit that PAID AS AGREED accounts are reported as included in bankruptcy.  I even had Trans Union employees FALSELY claim that their “unrated” bankruptcy reporting would not lower credit scores.

So this reader has some options:

1) Get an attorney to sue Nelnet.

If the reader DOCUMENTS his damages, he can probably find an attorney to take his case on contingency.

He needs to get his FICO scores at myFICO (30% discount through March) and he needs to analyze the FICO score factors to PROVE that his scores are lowered.  That should be easy and many FICO score examples and free help are available at CreditFactors.  A 6-month CreditFactors subscription is FREE with a $50 donation to Liars and Cheats EXPOSED!

I wonder if the Nelnet account rates as a RECENT delinquency when they report it as “included in bankruptcy.”  That depends on the reported date of last activity, status date and date closed, depending on the credit bureau.

It would be extra cool to have the scores WITHOUT the Nelnet account, but of course that can also be accomplished AFTER they PERMANENTLY delete once they have been sued.

Any decline letters based on credit would also be very helpful.

If there are none, it would be helpful to apply for a mortgage BEFORE filing suit, but this would also negatively impact on future scores due to the inquiry.  It is unfortunate that so many judges are so corrupt and DISMISS suits without absolute proof of damages due to declines.

2) Publish the regulatory complaints about Nelnet and the CRAs.

An appropriate example is the DeVry false student loan reporting.  There was NOTHING I could do to get DeVry to correct the incorrect late payments for my client.  Even the DeVry manager insisted that the lates were correct.

Only after we published the regulatory complaint was the account DELETED:

Credit Bureau Experian and DeVry Reporting False Late Payments and Refusal to Delete

Notably, the FTC NEVER investigates complaints since Bush took over in 2000, but often creditors and CRAs will finally correct/delete after receiving the PUBLISHED complaints because they are concerned that the consumers will retain an attorney to sue them.

So the complaints to the FTC are published only to prove its corruption, but the complaints ALSO go the the client’s and creditor’s and/or CRAs’ attorney general.  Many STATE AGs WILL investigate.

If that doesn’t get results, the published complaints are an EXCELLENT case summary for ATTORNEYS.  Of course consumers could and SHOULD sue even after corrections/deletions and they at least should get reimbursed for my fees, but most people are just glad to finally have the credit they deserve and want to avoid the stress of litigation at all costs.

Of course consumers CAN sue without an attorney and some of my clients have been successful, especially in small claims.

It usually works best when dealing with debt buyers:

How to get a NEW collection account deleted and PERMANENTLY closed

Some creditors prefer to AVOID the negative publicity and decide to do what’s RIGHT when they see my publications.

It is very unfortunate that this is what it takes to get the credit you deserve.  But after over 20 years of dealing with credit, I find that too many consumers make FALSE threats of lawsuits and creditors, collectors and credit bureaus usually IGNORE those threats because the chances of being sued are almost none.

And that’s why we also offer blogs for individual consumers who want to publish their problems and efforts to get disputes resolved without litigation or prior to litigation.  At this time, there is NO charge whatsoever to set up a Liars and Cheats EXPOSED blog.  Please contact us if you’d like to set up your own blog at Liars and Cheats EXPOSED.

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