A few months ago I began giving each of the three credit bureaus and each of the two check reporting services, ChexSytems and Telecheck, notice of the bankruptcy filing, so that they have actual notice. My intent is to at some point conduct an audit of clients who have continuing credit reporting issues or issues such as those discussed in opening new accounts. It seems to me that the argument can be made, especially where substantially all institutions subscribe to the systems, that there is anti-trust issues (I agree with David) or at least a concerted effort to circumvent the discharge.
It seems that if there is an agreement to remove adverse reporting in exchange for payment of the debt, a case may be made. So, have the client send a check that is specially endorsed on the back to reference an accompanying letter that states the check is sent in consideration for removal from ChexSystems or Telecheck. Keep a copy of the front and back of check along with the letter and proof of mailing (just like a Post Petition Preconfirmation Mortgage Declaration would require). When the check is negotiated have the client get a copy of the check from the bank from which it is issued. Of course, if a check cannot be sent, send a check from your account on behalf of the client, stating in the letter that you are sending the check on behalf of your client because they cannot open an account. Also, state the reporting is disputed because of the discharge. Follow same procedure.
When a copy of the check comes back, make demand upon the two systems to remove the adverse reporting. Specially endorsed checks that are duly negotiated subject to a dispute and letter of explanation may be enforced against the payee under the Commercial Code. I have not had an opportunity to test out the theory, but I see no reason why it should not work. Time will tell!!
Lou
wrote:
>
> I have had several clients on the system over the years. Even if the "debt" is repaid, it will still be reported, the reporting bank claiming that it has a duty to protect other institutions.
>
>
>
> Kenneth Jay Schwartz, Esq.
> LAW OFFICE OF KENNETH JAY SCHWARTZ
> 21031 Ventura Boulevard, 12th Floor
> Woodland Hills, California 91364-2203
> Telephone: (818) 226-1205
> Facsimile: (818) 226-1213
>
>
>
>
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>
>
>
> ________________________________
> To:
cdcbaa@yahoogroups.com
> Sent: Monday, March 30, 2009 6:25:09 PM
> Subject: RE: [cdcbaa] Consumer not able to open cking acct.
>
>
> I've always thought that the continued reporting of a
> debtor on chex systems could (and I stress could) be a violation of the
> discharge injunction in that the member bank continues to report on the debt
> even though the debtor no longer has a legal obligation to pay on
> it. Perhaps if one of us has a case filed before the right judge
> (i.e. Bufford), an appropriate motion against the bank could be
> brought.
>
>
> ________________________________
> [mailto:cdcbaa@ yahoogroups. com] On Behalf Of Patrick
> Green
> Sent: Monday, March 30, 2009 6:13 PM
> To: cdcbaa@yahoogroups. com
> Subject: RE: [cdcbaa] Consumer not able to open
> cking acct.
>
>
> Not my first experience, but I
> couldnt remember the name which inhibited my research.
> I have been researching this
> further since my post. The name was needed for the research. They
> are considered a credit reporting agency under the FCRA (Fair Credit Reporting
> Act). So far all reported cases agree. As my client does owe the
> reporting bank, I dont believe there is any FCRA violation.
> In anticipation of filing, she
> was attempting to move her banking to non-creditor institutions when she ran
> into the problem. She actually tried a small credit union, but was only allowed
> to open an acct with in bank transactions only. She is going to try to pay off
> the reporting bank, to which she owes very little, in exchange for removal from
> the List.
> Thanks to all for your
> responses.
> Pat
> Patrick T. Green,
> Esq.
> Fitzgerald &
> Green
> Attorneys at
> Law
> 1010 E. Union
> Street
> Suite 206
> Pasadena, CA
> 91106
> Tel:
> 626-449-8433
> Fax:
> 626-449-0565
> pat@fitzgreenlaw. com
> From:cdcbaa@yahoogroups. com
> [mailto:cdcbaa@ yahoogroups. com] On Behalf Of David A.
> Tilem
> Sent: Monday, March 30, 2009 5:57 PM
> To: cdcbaa@yahoogroups. com
> Subject: RE: [cdcbaa] Consumer not able to
> open cking acct.
> As Hale has said, this is the CHEX system. It has
> been in existence for about 15-20 years. I'm surprised this is your first
> experience with it. The system began with an informal agreement between> and among a certain number of large banks to "blackball" anyone who bounced a
> check or filed bankruptcy with a ready-reserve account balance. The system
> has since expanded to include almost all banks and Credit Unions, and they have
> expanded the reach by asking people to pay their credit cards "automatically"
> from their checking accounts. When credit cards are not paid, they "pay"> the card using the ready-reserve account and, well, you can guess the
> rest.
> The system arguably violates anti-trust laws and is
> anti-competitive. It is also bad for the economy because it precludes a> fresh start. Arguably one cannot participate in the modern economy absent
> any bank relationship. It is also bad for the govt because people who
> don't have bank accounts tend not to pay income taxes and live on a cash> basis. In short, this system is bad for everyone.
> The system appears to be completely unregulated.
> It is not covered by the FDCPA or a bankruptcy discharge. Banks simply
> argue that they don't have to do business with anyone they don't like. Of
> course when all of them get together and say the same thing, it's probably a
> violation of antitrust laws, but which one of us wants to take on that
> battle?
> One work-around: have your client form a 1 member LLC,
> get a new tax ID number and open the account number for the LLC. Another> is to have your client open new accounts at a new bank before the bankruptcy
> case is filed, but some banks are now looking to see if their new customers get
> listed on CHEX within a short period after new accounts are opened. I
> have had clients see their new accounts closed and their deposits
> refunded. This is a huge consumer problem which no one seems to have
> noticed and it has been growing for years.
> David A.
> Tilem
> Certified Bankruptcy
> Specialist*
> Law Offices of David A. Tilem
> (a debt relief agency)
> 206 N. Jackson Street, #201,
> Glendale, CA 91206
> Tel: 818-507-6000 Fax:
> 818-507-6800
> * Bankruptcy specialist
> cert. by State Bar of CA Bd of Legal Specialization.
> Business bankruptcy specialist cert. by Amer.
> Bd. of Certification
> -----Original
> Message-----
> [mailto:cdcbaa@ yahoogroups. com] On Behalf Of Patrick
> Green
> Sent: Monday, March 30, 2009 5:19 PM
> To: cdcbaa@yahoogroups. com
> Subject: [cdcbaa] Consumer not able to
> open cking acct.
> Financial institutions have some list they put consumers on
> that restricts them from opening cking accts and engaging in other banking
> activities. They do this based on the consumer writing hot checks or
> some other bad act.
> What is the name of this list and what is the source of their
> authority, if any, to do so?
> TIA
>
>
>
> Pat
> Patrick T. Green, Esq.
> Fitzgerald & Green
> Attorneys at Law
> 1010 E. Union Street
> Suite 206
> Pasadena, CA 91106
> Tel: 626-449-8433
> Fax: 626-449-0565
> pat@fitzgreenlaw. com
>
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