The credit bureau, Experian, is facing a lawsuit that alleges the improper reporting of thousands of borrowers, whose student loans were erased in bankruptcy. Allegedly, these reports show that the student borrowers still owed money on delinquent student loans. The lawsuit seeks damages for violations of the U.S. Fair Credit Reporting Act and a related New York state law, which require credit bureaus to use reasonable methods to ensure their credit reports are accurate. Plaintiffs argue Experian lacks adequate internal procedures to be able to update credit reports to show when student loans have been discharged. Under the Bankruptcy Code, most kinds of student loans cannot be discharged or cancelled in bankruptcy proceedings. However, one exception to this general rule is that loans may be discharged if they were issued for schools that were not qualified or approved to participate in federal student aid programs by the U.S. Department of Education.
Lawsuit says Experian keeps canceled student loan debt on credit reports
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