Chexsystems is a company that reports overdrafts and bounced checks to banks.
It is kind of like a credit report for how people use their checking accounts.
When you go to open a checking account, the bank will look at your Chexsystems report to see if you are a good candidate.
This creates problems for people who have faced financial hardship and have had bounced checks and overdrafts in their recent past.
Banks often don’t let people with overdrafts or bounced checks on their Chexsystems report open new checking accounts.
CHEXSYSTEMS AND BANKRUPTCY
Bankruptcy discharges consumer debts like overdrafts and bank fees – it doesn’t discharge criminal check fraud, but a check fraud conviction is very uncommon.
- Bouncing a check or getting an overdraft is not check fraud, even if a collection agency tells you that it is
Since a Chexsystems report lists the money that a debtor owes to the bank, it must be changed after you get a bankruptcy discharge.
After the bankruptcy, each tradeline should read “included in bankruptcy” or “discharged in bankruptcy”.
OBTAINING YOUR CHEXSYSTEMS REPORT AND STARTING THE DISPUTE
- Just like with credit reports, you are entitled to a free copy of your Chexsystems after bankruptcy
Click this link to start the process. (Please note that you must wait until you get your bankruptcy discharge to do this).
You will get the bankruptcy discharge about 3 months after your bankruptcy is filed if you filed a Chapter 7 bankruptcy, or 3 to 5 years later if you filed a Chapter 13 bankruptcy.
WHAT TO DO NEXT
Once you have the report, then you look at it to find out if any of the entries still have a balance.
- Remember, they should all be at $0, or say discharged in bankruptcy, or both
If you find an incorrect entry, then you should go through the Chexsystems dispute process.
- Once you have done the Chexsystems dispute, they have 30 days to investigate and correct the entry
Chexsystems is supposed to contact the bank responsible for the entry and then delete it once they discover that you no longer owe the money.
If they do nothing and fail to delete it after 30 days, then you may be able to sue for violation of the Fair Credit Reporting Act (FCRA).
If you need help with Chexsystems disputes then why not call us at 612.824.4357 and tell us how we can help you.
Photo Credit: © Edwin Correa | Dreamstime.com
