District Court (Nev.) Says Debt Was Accurately Reported Through and After Chapter 13 Bankruptcy

As a court stated in this District, “[t]he [c]ourt was unaware of any statute or case providing that discharge in bankruptcy makes a debt unreportable as opposed to uncollectable.” Abeyta v. Bank of Am., No. 2:15-cv-02320-RCJ-NJK, 2016 WL 1298109, at *2 (D. Nev. Mar. 31, 2016). “The fact that Congress explicitly permits bankruptcies themselves to be reported for ten years from the date of discharge, see 15 U.S.C. § 1681c(a)(1), undermines any argument that Congress intended specific debts discharged in bankruptcy to be categorically unreportable.” Id. Moreover, “the details of such debts are listed in the publicly available bankruptcy schedules.” Id. The court concluded that because the FCRA does not prevent the reporting of delinquencies as to discharged debts for seven years and bankruptcies for ten years, “Congress has thereby chosen a balance between rescuing consumers from overwhelming debt by providing a discharge mechanism and protecting potential creditors going forward by permitting the reporting of delinquencies concerning the discharged debt, as well as the fact of bankruptcy itself, for the relevant periods.” Id.  Here, Mrs. Florence argues that “the Shellpoint and SPS Accounts were both subject to the controlling terms of … [the] Confirmed Plan, thus any derogatory information reported … after the petition date could only be reported if at all, if [Mrs. Florence] failed to meet her obligations under the [Confirmed] Plan.” (Mrs. Florence’s MSJ 20:20–23). Mrs. Florence continues, “[t]he undisputed facts establish that both [Shellpoint and SPS] were paid under the [C]onfirmed Plan.” (Mrs. Florence’s MSJ 21:4–5). Experian argues, however, that because the information reported occurred before the Discharge, Mrs. Florence cannot establish any inaccuracy. (Resp. 2:5, ECF No. 165).  Although the Bankruptcy Code prevents certain collection activities, it does not alter the fact of delinquency. Essentially, “the FCRA does not prohibit the accurate reporting, after discharge, of debts that were delinquent during the pendency of the bankruptcy action.” Mortimer v. Bank of Am., 2013 WL 1501452, at *10 (N.D. Cal. Apr. 10, 2013). Although Mrs. Florence alleges that the Confirmed Plan and the Discharge could be rereported only if she “failed to meet her obligations under the [Confirmed] Plan,” it does not render the reports in their prior delinquency false in-and-of-themselves. See Abeyta, 2016 WL 1298109, at *2; see. e.g., Polvorosa v. Allied Collection Serv., Inc., No. 2:16–cv–1508-JCM-CWH, 2017 WL 29331, at *3 (D. Nev. Jan. 3, 2017) (“[R]eporting delinquencies during the pendency of a bankruptcy or during a bankruptcy’s automatic stay is not itself a violation of the FCRA.”); Doster v. Experian Info. Sols., Inc., No. 16-cv-04629-LHK, 2017 WL 264401, at *4 (N.D. Cal. Jan. 20, 2017) (“[A]s a matter of law it is not misleading or inaccurate to report a delinquent debt during the pendency of a bankruptcy.”).  Mrs. Florence asserts that Experian continued to rereport monthly account balances and scheduled payments “for the period of March 2014 through September 2015,” after the Discharge. (Mrs. Florence’s MSJ 21:5–7). However, “historically accurate debts may be reported even after discharge, so long as the credit report indicates that the debts were discharged in bankruptcy.” Harris v. Experian Info. Sols., Inc., No. 16-cv-02162-BLF, 2017 WL 1354778, at *6 (N.D. Cal. Apr. 13, 2017); see Mortimer, 2013 WL 1501452, at *9–11 (holding that the furnisher’s reporting that the debt had been delinquent during the pendency of the bankruptcy was historically accurate and thus not actionable under the FCRA where report also indicated that the debt had been discharged in bankruptcy). Once Mrs. Florence notified Experian that these debts were remedied by the Confirmed Plan and Discharge, and Experian concluded its reinvestigations, Experian updated the Shellpoint and SPS accounts to state “Discharged through Bankruptcy Chapter 13.” (December 10, 2015 Consumer Disclosure at 6, Ex. E to Resp., ECF No. 165-5). Because the actual existence of these debts were not patently false, and Experian ultimately updated the reports to state that they were discharged, the Court denies summary judgment on the Shellpoint and SPS accounts. See Abeyta v. Bank of Am., 2016 WL 1298109, at *2.