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Banks Agree to Remove Credit Notations on "Zombie" Debt
Friday, May 8, 2015
A million or more consumers nationwide
may see their credit histories improve as a result of an agreement in a Federal
Bankruptcy Court in White Plains, New York.
As a result of two separate lawsuits brought in the court Bank of
America and JPMorgan chase have agreed to update borrowers' credit reports to
eliminate data on so-called zombie debts, delinquent accounts that had actually
been extinguished in bankruptcy.
The banks, along with Citigroup and Synchrony
Financial (formerly GE Capital) had been charged in the suit with retaining the
information on the credit reports as live debts to enable the banks to generate
higher prices for the loans when sold in pools to investors as bad debts.
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