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What Are Your Coronavirus Mortgage Relief Options?

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If you’re a homeowner with a federally backed mortgage who is struggling financially during the coronavirus outbreak, you should know the CARES Act offers mortgage relief in the form of a foreclosure moratorium as well as options for placing your mortgage in forbearance.

Following the outbreak, many people are unemployed or otherwise struggling financially. One of the most difficult monthly obligations to manage is a mortgage payment. Especially when mortgage terms include a high monthly payment, even one month of unemployment or financial hardship can put borrowers behind on their home loan.

Thankfully, the CARES Act includes protections for homeowners with qualified mortgages, who are enduring financial trouble due to the coronavirus outbreak. Here we’ve broken down the coronavirus mortgage relief options available and detailed how homeowners can take advantage of them.

Chart: CARES Act Mortgage Relief

What Are the Two Mortgage Relief Options?

The two mortgage relief options included in the CARES Act are mortgage forbearance and a moratorium on house foreclosures. Specifically, the CARES Act states that:

  • Homeowners with federally backed mortgages who are experiencing financial hardship due to COVID-19 can request a 180-day forbearance on their mortgage, which can be extended another 180 days at the borrower’s request.
  • Federally backed mortgage servicers cannot initiate a foreclosure, conduct a foreclosure hearing or execute a foreclosure sale or foreclosure-related eviction until May 18, 2020.

How to Find Out If You Qualify for CARES Act Mortgage Relief

To find out if you’re eligible for the mortgage relief protections in the CARES Act, you need to determine if your mortgage is backed by a federal entity. You can figure this out by looking up your mortgage online, calling your mortgage servicer or sending a request in writing to determine who owns your mortgage.

Nearly half of all mortgages in the United States are backed by Fannie Mae or Freddie Mac. You can use these look-up tools to determine if yours is one of them:

In addition to Fannie Mae and Freddie Mac, other federal agencies that back mortgages are:

Chart: Federal Loan Providers

How to Request a Mortgage Forbearance

The moratorium on foreclosure procedures is automatic for those with federally backed mortgage loans. If you have a federally backed mortgage and your home was in the process of or about to enter foreclosure, you can anticipate that those proceedings will be halted until May 18, 2020. During this time, you can contact your servicer to inquire about getting a forbearance, instead. It is important to contact your mortgage servicer to make sure your foreclosure proceedings have been halted.

If you decide you need to request a forbearance, these are the steps to take:

1. Gather the relevant information.

You’re going to need several pieces of information during the process of requesting mortgage relief, so it’s best to gather them ahead of time. Be prepared to provide:

  • Your loan account number
  • The cause of your financial hardship and its relationship to the Coronavirus (COVID-19) outbreak
  • How long you expect the hardship to endure
  • Personal financial details, like income, unemployment benefits, expenses and your current assets

These are the basic details you should have on hand, but individual loan servicers may have other recommended requirements. You should check your individual provider’s website to be certain.

If you’re in the military and currently on orders, you’ll want to let your servicer know that as well.

2. Call your mortgage servicer.

Keep in mind that your mortgage servicer is not the same as the entity that owns or backs your loan. Typically, a bank or mortgage broker will act as your loan provider, and (in the case of federally backed loans), the entity that owns the loan will be a federal organization like Freddie Mac or the United States Department of Agriculture.

To request mortgage relief, you need to contact your loan servicer. Their contact information should be included in your monthly mortgage statement.

During the Coronavirus (COVID-19) crisis, you should anticipate a long hold period when you call your servicer. Since mortgage relief requests are currently at a peak, it will likely take longer to reach your provider.

3. Ask for the help you need.

Once you’re connected with a representative from your loan provider, ask for the mortgage relief you need. Since different states and individual loan providers may offer additional relief options besides those explicitly included in the federal CARES Act, you should begin by simply asking what mortgage relief options are available to you. 

In addition to forbearance, which is mandated for federally backed loans, your servicer may offer loan modification options or waive your late fees.

Your servicer will likely ask for information like what financial hardship you are experiencing, how long you expect to need relief, and the details of your current financial situation, which is why you should have this information readily available when you call.

In the process of this conversation, your servicer will let you know what your options are and what you need to do in order to activate them.

4. Follow up in writing.

Once you and your loan servicer have settled on a mortgage relief option that works for you, be sure to request a written document reflecting what you discussed and the details of your agreement’s terms. Be sure to clarify the end date of your forbearance period and what is required of you after the fact.

In some cases, you can resume monthly payments as usual, while some forbearance agreements require a lump sum payment at the end of the relief period. Be sure you’re prepared to satisfy the terms of your agreement exactly as they’re laid out.

What to Do After Receiving Mortgage Relief

Even after being approved and receiving mortgage relief, it’s important to stay on top of your relief agreement and resume payments as soon as you’re able.

Here are best practices for moving forward after reaching a mortgage relief agreement:

  • Work to protect your credit. Since missed mortgage payments without an approved forbearance will damage your credit, it’s important to ensure your servicer accurately recorded your forbearance agreement and your paused payments aren’t reflected on your credit. Now might be a good time to request one or more of your three free annual credit reports to check for and dispute errors.
  • Keep paying other expenses. The CARES Act contains many options for putting off monthly payments without penalty, so it’s essential that you continue to stay on top of your other bills, if you’re able. Mortgage relief can protect your credit, but only if you’re not delinquent on your other accounts during this time.
  • Keep an eye on your mortgage. Keep the paperwork from your forbearance agreement on record and continue to review your monthly statements as thoroughly as you would if you were making payments. If you spot an error, dispute it immediately.
  • If you have extra cash flow, consider making partial payments. If you’re working part-time or receiving unemployment benefits, you may find you have some extra income despite not being ready to resume regular mortgage payments. In this case, consider making partial mortgage payments even while your loan is in forbearance. You’re still going to owe the entirety of the loan later, so putting down extra now will lighten your financial load later on.
  • Resume payments as soon as you’re able. If you resume work while your mortgage is in forbearance, be sure to contact your servicer to resume your mortgage payments right away. It can be tempting to let your payments remain paused, but a shorter forbearance period means less financial burden for the remainder of the loan.
How to Make the Most of Mortgage Relief

How to Find State-Level Mortgage Relief Options

Many states have passed coronavirus relief laws that expand on the protections included in the federal CARES Act. When investigating your financial relief options, be sure to look up protections offered at the federal, state and local levels. Individual mortgage servicers are also opting to offer their own accommodations, so you should inquire with your loan officer directly as well.

How to Decide If You Should Ask for Mortgage Relief

Mortgage forbearance is available to anyone with a federally backed mortgage who has experienced a coronavirus-related financial hardship. If you fit these qualifications but are capable of paying your mortgage—whether through cash reserves or other personal resources—the best course of action is to continue making mortgage payments.

From a strictly ethical perspective, relief aid should be reserved for those who absolutely need it most. Mortgage servicers can only accommodate a certain number of relief requests at once, so it’s important that their resources be allocated to those who are most in need.

Beyond ethics, it’s also smartest strategically to continue paying your mortgage whenever possible. Pausing mortgage payments unnecessarily can make payments more difficult down the line, and you may not have the same mortgage relief options available in the future. When it comes to home loans, paying earlier is usually the better option when possible.

As you navigate the complicated world of financial relief during the coronavirus outbreak, keep in mind that many of the provisions in federal, state and local laws require the individual to proactively request relief. That means you need to know what benefits are available and how to access them rather than anticipating that relief will come to you. In fact, any relief options that do come to you directly may be scams, so be sure to vet all relief offers diligently before entering into an agreement.

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How Long Before a Creditor Can Garnish Wages?

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The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Have you gotten yourself into a bad financial situation and started wondering how long you have before a creditor can garnish your wages? The answer can be a bit complicated, but in most cases, you don’t need to worry about wage garnishment until your debt has been delinquent for several months.

If you’re in this situation, then you should also know that the wage garnishment process itself can also take multiple weeks, depending on specific circumstances. Keep reading to find out more about wage garnishment.

Understanding Wage Garnishment

Wage garnishment is a legal procedure during which an individual’s earnings are required, by court order, to be withheld by the employer for the purpose of debt repayment.

There are two types of garnishment: wage and nonwage.

  • Wage garnishment means that your employer is legally required to withhold a specific amount of earnings as a result of the court order which is often called a “Notice of Garnishment.”
  • Nonwage garnishment (also known as a bank levy) is when a creditor contacts your bank and accesses funds directly from your bank account.

Typically, wage garnishment happens in one of two ways:

  1. A creditor sues you for nonpayment and wins via judgment.
  2. A state or federal agency initiates a garnishment in cases like  child support, back taxes and federal student loans.

Wage garnishment will continue until the debt is paid off or otherwise resolved. Some states have time limitations for how many years a creditor may garnish wages. Additionally, wage garnishment will be halted if you lose employment.

The total amount subject to garnishment can often include court fees and any interest accrued.

The court will notify you of the impending wage garnishment. Additionally, the court will send a notice either to your bank or your employer. Wage garnishment typically starts within five to 30 days after approval. The exact time will vary depending on the creditor and the state.

How Much of Your Paycheck Can Be Garnished?

There are federal limitations on how much of your paycheck can be garnished, depending on your income level and the type of debt that is owed.

There are also individual state laws about wage garnishment that vary. State laws may often have additional protections, including factors like being the head of a household with dependent children.

Judgments

If you lose a lawsuit and a judgment is entered against you, the creditor or person who won the suit can garnish your wages up to whichever is the lower of these two amounts:

  • 25 percent of your disposable earnings
  •  Any amount greater than 30 times the federal minimum wage (which is currently $7.25)

Note that your employer must notify you about a wage garnishment before it begins, and your employer has to provide you with information on how you can request a hearing about the wage garnishment.

Child Support and Alimony

Child support and alimony are the two types of debt with the most considerable potential for wage garnishment. According to federal law, you can have up to 60 percent of your income garnished. If you’re supporting another child or spouse, the maximum is lowered to 50 percent. Additionally, if you’re more than 12 weeks late on payments, an additional five percent can be taken.

Student Loans

The US Department of Education or any agency collecting on its behalf can garnish up to 15 percent of your pay. This can only occur if you’re in default on your student loan. Student loans are different as they don’t require a lawsuit to proceed with wage garnishment. As soon as your student loans are in default, there’s potential for garnishment.

However, you need to be notified in writing at least 30 days before the wage garnishment is set to begin. The notice needs to include several important details, such as:

  • The total amount you owe;
  • How to get a copy of records related to your loan;
  • How to enter into a voluntary repayment schedule; and
  • How to request a hearing on the proposed wage garnishment.

Taxes

Back taxes is another situation where a court order isn’t necessary. If you owe back taxes to the IRS, they can usually take up to 15 percent. In reality, they will take into consideration several factors before deciding on how much to garnish. The IRS will look at how many dependents you have and your standard deduction amount.

The IRS will notify your employer with a wage levy notice. Your employer will then give you a copy. This notice includes an exemption claim form, which you may want to complete.

State and local tax agencies also have the right to take some of your wages. However, there will be limitations in place on how much they can take, depending on the state.

Exempt Income

Every state has certain types of income that are protected from wage garnishment. Depending on your situation and your income stream, you may be able to protect some or all of your wages.

Generally speaking, the types of exempt income are:

  • Social Security;
  • Disability;
  • Veterans’ benefits;
  • Pension and retirement benefits;
  • Child support; and
  • Alimony.

Additionally, low-income earners who have little or no disposable income may be allowed to keep their wages.

Can You Be Fired for Having Your Wages Garnished?

You cannot be fired or retaliated against in any way by an employer because your wages have been garnished. However, this protection is removed if you have more than one wage garnishment in place. Under federal law, you’re only protected when one creditor is garnishing your wages.

Some states offer more protection, but it’s essential to determine what the protection is in your state. If you have more than one wage garnishment against you, it’s important to talk to your employer and explain your plan of action to rectify the situation.

Can You Protest a Wage Garnishment?

There are several ways to seek relief from a garnishment; however, the best way would be to address the situation prior to a creditor obtaining a judgment against you, either by hiring legal counsel or representing yourself.

Additionally, note that when you receive a notice of garnishment, you may still be ableto work out a deal with your creditors. For example, your federal student loan creditor may offer you the opportunity to opt into a voluntary repayment plan rather than proceed with wage garnishment.

Claim of Exemption

If your income is coming from a source categorized as exempt, you may need to act quickly. Monthly income or savings collected from an exempt income source cannot be garnished. However, you will need to submit a claim of exemption to stop the wage garnishment.

Before your paycheck is garnished for the first time, your employer will give you a notice. The notice includes instructions for filing a claim of exemption. The notice will have an address with the appropriate clerk’s office where you will need to file the claim.

The cost of filing a claim of exemption is minimal but may be extremely beneficial. If approved, it can substantially reduce the amount of your garnishment. You’ll have a hearing in which you can list your living expenses and show any attempts you’ve made to handle the debt without garnishment.

Note that it can take one to two months to schedule a hearing, so you’ll want to file the claim as soon as you receive the wage garnishment notice.

Does Wage Garnishment Affect Your Credit?

The wage garnishment won’t appear as a negative item on your credit reports, but it could be notated on the account in question. While the garnishment itself won’t hurt your score, being late on payments will.

Luckily, you can still take action to improve your credit during and after a wage garnishment. Start by working with a credit repair service, like Lexington Law, to get a good understanding of what condition your credit is in and if anything can be done to help it today.


Reviewed by Kenton Arbon, an Associate Attorney at Lexington Law Firm. Written by Lexington Law.

Kenton Arbon is an Associate Attorney in the Arizona office. Mr. Arbon was born in Bakersfield, California, and grew up in the Northwest. He earned his B.A. in Business Administration, Human Resources Management, while working as an Oregon State Trooper. His interest in the law lead him to relocate to Arizona, attend law school, and graduate from Arizona State College of Law in 2017. Since graduating from law school, Mr. Arbon has worked in multiple compliance domains including anti-money laundering, Medicare Part D, contracts, and debt negotiation. Mr. Arbon is licensed to practice law in Arizona. He is located in the Phoenix office.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

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Black Friday Spending: 25 Key Trends

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The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

For many, Black Friday marks the start of the holiday shopping season. A day known for its significant deals and discounts in retail stores and beyond, it falls on the Friday after Thanksgiving and stirs quite the frenzy among holiday shoppers.

Being the first day after the last major holiday before Christmas, the undeniable high volume of Black Friday spending has made it one of the more profitable retail days of the year. Countless stores reserve this day for their largest sales of the year, most notably on electronics, jewelry and toys.

Falling closely after Black Friday is Cyber Monday, which takes place on the Monday after Thanksgiving. While both are known for their fantastic deals, the main difference between the two is that Cyber Monday is strictly dedicated to online shopping and bargains found online. Black Friday deals are both online and in brick-and-mortar stores.

Although there are deals to be had on these days, it’s important to remember that needless purchases can be a significant driver of credit card debt. Huge sales events like Black Friday and Cyber Monday can easily tempt you into spending money you don’t have.

Given that 57 percent of 2019 Black Friday spending was done using credit, make sure whatever you purchase this year is something you actually need (and not just an impulse buy driven by perceived savings).

Black Friday Spending Statistics

With many stores opening as early as midnight the day after Thanksgiving, shoppers wait all year in anticipation of Black Friday. Consumers are willing to camp out in front of their favorite stores in order to be first in line for doorbuster deals, or travel out of town just to snag a coveted sale.

  1. 174 million Americans shopped between Thanksgiving and Cyber Monday in 2017, which beat the National Retail Federation’s pre-holiday prediction that 164 million shoppers would participate. [Source: National Retail Federation]
  2. Those 174 million Americans spent an average of $335.47 per person.  [Source: National Retail Federation]
  3. Black Friday digital revenue grew by 14 percent in 2019 over the previous year. [Source: Salesforce]
  4. Around 63 percent of growth in the holiday retail market is due to Ecommerce growth. [Source: Adobe]
  5. Digital revenue for Black Friday 2019 amounted to $7.2 billion. [Source: Salesforce]
Black Friday digital revenue grew by 14% in 2019.

Demographic Trends

The earlier years of Black Friday typically drew in droves of parents buying gifts for their families and children. These days, more Millennials and Gen Z shoppers have taken to participating in Black Friday. Location-wise, the top spending states in 2019—North Dakota, Texas and Wyoming—are typically those with a lower-than-average cost of living.

  1. Millennials were the biggest spenders on Black Friday in 2019. [Source: PYMNTS]
  2. Millennials spent an average of $509.50 on Black Friday in 2019. [Source: PYMNTS]
  3. While Millennials took the lead for highest spend, Black Friday spending increased by 34.1 percent for consumers of all ages and incomes between 2018 and 2019. [Source: PYMNTS]
  4. Bridge Millennials—those who bridge the age gap between Generation X and Millennials—spent an average of $479.40 on Black Friday in 2019, the second-highest average spent of any age group. [Source: PYMNTS]
  5. Almost 60 percent of shoppers 73 and older said they would not shop on Thanksgiving Day in 2019. [Source: PWC]
Millennials were the biggest Black Friday shoppers in 2019, spending an average of $509.50.

How Are People Shopping on Black Friday?

In years past, Black Friday was famous for drawing enormous crowds into physical retail stores, malls and big-box stores like Best Buy, Walmart and Target. Mile-long lines of tents camped outside the evening of Thanksgiving was typical, and setting out to shop at midnight was a normal occurrence.

In recent years, however, the shopping frenzy has transformed into an online affair, with more consumers choosing to snag their deals from the comfort of their own homes with digital purchases.

On top of this new trend, the current pandemic has shifted the way consumers shop in 2020. Because of this, Lexington Law polled 2,000 Americans to see if they would be staying home this Black Friday. An astonishing 79 percent of respondents said they plan to stay home.

Are Americans Staying Home This Black Friday? 21%: No; 79%: Yes.
  1. Black Friday 2019 saw 142.2 million buyers shopping online. [Source: National Retail Federation]
  2. $2.9 billion in Black Friday sales were purchased on smartphones, making Black Friday 2019 the biggest shopping day for smartphone sales ever. [Source: Money]
  3. About 58 million people only shopped online, while 51 million people shopped exclusively in stores on Black Friday in 2017. [Source: National Retail Federation]
  4. About 40 percent of U.S. consumers didn’t make any purchases at all on Black Friday in 2019. [Source: PYMNTS]
  5. A quarter of 2019 Black Friday shoppers traveled more than 25 miles to visit a physical store. [Source: Fiserv]
  6. Black Friday 2017 consumers who shopped both online and in store spent $82 more than the online-only shopper, and $49 more than the in-store-only shopper. [Source: National Retail Federation]
  7. 73 percent of digital traffic on Black Friday 2019 came from a mobile device. [Source: Salesforce]
  8. Sales from Americans shopping on their smartphones were predicted to increase by $14 billion in 2019 compared to 2018. [Source: Adobe Analytics]
  9. 4.2 percent of all Black Friday 2019 mobile orders were sourced by a social media referral. [Source: Salesforce]
  10. Amazon accounted for 54.9 percent of all sales on Black Friday in 2017. [Source: TechCrunch]

What Are People Shopping for on Black Friday?

Compared to a typical Friday, certain categories’ sales skyrocket on Black Friday. Clothing, electronics, grocery items, books, music and sporting goods are common categories of spend year after year. Other items, such as home furnishings, tools and auto parts are less commonly shopped, but they still see an increase in spend during Black Friday.

  1. In 2019, electronic sales were five times higher on Black Friday as compared to an ordinary Friday; sporting goods were 4.5 times higher; and clothing was four times higher. [Source: Fiserv]
  2. Jewelry topped the “best deals” category for products bought on Amazon on Black Friday in 2019. [Source: Money]
  3. In 2019, clothes and accessories were the primary driver of Black Friday spending, both online and offline. 56 percent of shoppers purchased them online and 57.3 percent shopped in stores. [Source: PYMNTS]
  4. Shoppers now turn to their favorite brands’ social media feeds to find deals and products. In 2019, the brands with the most social callouts on Black Friday were PlayStation, Nintendo, Apple, Xbox and Google. The top five retailers were Amazon, Walmart, Target, GameStop and Best Buy. [Source: Salesforce]
  5. Of consumers who shopped for gifts during Black Friday 2019, 58 percent went for apparel; 33 percent went for toys; 31 percent went for electronics; 28 percent went for books, music, movies or video games; and 27 percent went for gift cards. [Source: National Retail Federation]
Top Black Friday Money Makers in 2019: Apparel, Toys, Electronics.

This Year, Shop Smart

Events like Black Friday and Cyber Monday aren’t inherently bad, but they can certainly push you to spend more than you can afford if you aren’t careful. If you plan on using your credit card for Black Friday shopping this year, make sure you establish how much you can afford to borrow at once. Once you determine that number, don’t deviate from it—no matter how sweet those sales might seem!

The amount of credit you borrow compared to your revolving credit limit is what determines your credit utilization ratio, which should be kept as low as possible. Generally, if that ratio exceeds 30 percent, you risk a drop in your credit score.

By establishing your personal credit limit up front (in other words, the amount of credit you can afford to pay back on time), you’ll save yourself financial stress down the line. Avoid that burden and allow yourself to enjoy the holidays by staying out of debt and shopping responsibly this season.

If you do find that your credit score isn’t where it should be, the consultants at Lexington Law Firm are always available to diagnose your credit and help you get back on track.


Reviewed by Cynthia Thaxton, Lexington Law Firm Attorney. Written by Lexington Law.

Cynthia Thaxton has been with Lexington Law Firm since 2014. She attended The College of William and Mary in Williamsburg, Virginia where she graduated summa cum laude with a degree in International Relations and a minor in Arabic. Cynthia then attended law school at George Mason University School of Law, where she served as Senior Articles Editor of the George Mason Law Review and graduated cum laude. Cynthia is licensed to practice law in Utah and North Carolina.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

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Public Records on Credit Reports

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The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

If you’ve ever looked at your credit report, you’ve probably noticed a section called “public records.” These are entries that are also on file with local, county, state or federal courts. Keep reading to learn more about which public records appear on credit reports.

What Are Public Records?

Public records are documents or pieces of information that are not considered confidential. Some examples include arrest records, marriage certificates and some court records. These are records that other people or entities could look up about you, as the information isn’t private or protected.

In the context of your credit report, historically, only three types of entries were public records: tax liens, civil judgments and bankruptcies. Now, only bankruptcies should show up as a public record on an individual’s credit report.

The Public Record Entries

First, it’s essential to understand the three types of public record entries that can impact your credit report.

A tax lien is a law-imposed lien upon property for the payment of taxes. Typically, a tax lien occurs when a person fails to pay taxes owed on property (personal and other), income taxes or other forms of taxes.

A civil judgment is a legal ruling against a defendant in a court of law. It refers to a judgment on a noncriminal legal matter and often requires the defendant to pay monetary damages.

Bankruptcy is a legal process in which people or other entities who cannot repay debts to creditors try to seek relief from some or all of their debts. In most jurisdictions, bankruptcy is usually imposed by a court and is often initiated by the debtor.

Understanding the Updated Public Record Policy

In 2017, the National Consumer Assistance Plan (NCAP) went into effect and changed how data is collected for civil judgments and tax liens before these entries appear as public records on credit reports. The act was initially launched in 2015 by the three major credit bureaus to modify credit reporting rules and set stricter standards. These new standards would ensure that the data found on credit reports are more accurate and up to date.

There are two primary ways this act affects how credit bureaus obtain and report tax lien and court judgment data on consumer credit reports. First, for either of these types of entries to appear on a credit report, the public record must contain a person’s:

  • Name
  • Address
  • Social Security number or date of birth

This standard applies to both new and existing records that are already on credit reports.

Secondly, public records reported on credit reports must be checked by the credit bureaus for updates every 90 days to ensure their accuracy. If the records are not checked, they should be removed from the credit report.

Bankruptcy records already hold these strict requirements, which is why the changes don’t impact this type of public record. However, many tax liens and civil judgments do not uphold these standards, in large part due to different standards of record-keeping at various courthouses.

This higher standard for public records is estimated to have positively impacted millions of US consumers. As this change applies to public records that were already on credit reports before the NCAP, it’s essential to review your personal credit reports to see if any public records are still being shown. Generally, tax liens and civil judgments shouldn’t be on your credit reports anymore.

By 2017, almost half of all tax liens and civil judgments were removed from consumer credit reports, and by April 2018, the three credit bureaus had removed all tax liens from credit reports. Currently, the only type of public record that should be present on your credit report is a bankruptcy.

Not a Permanent Change

It’s crucial to note that tax liens and civil judgments might not stay off credit reports forever. This is because reporting on them isn’t illegal and the credit bureaus only promised to remove them for a time. This could change sometime in the future, so you still want to avoid incurring these types of public records if possible.

How Do Public Records Affect Your Credit?

Typically, when a public record is added to your report, it’s considered a negative item. That’s because most public records on credit reports stem from a debt or financial delinquency. Therefore, it will usually lower your credit score.

Bankruptcy

A bankruptcy can remain on your credit report for seven to 10 years.

If you go through a Chapter 13 bankruptcy, you must repay a portion of the money you borrowed. This type of bankruptcy has a shorter impact on your credit report (seven years) because you paid some of the money back.

Under a Chapter 7 bankruptcy, the individual doesn’t pay any of their debts back. This type of bankruptcy will remain on your credit report for up to 10 years.

Bankruptcy will have a devastating impact on your credit, lowering it by anywhere from 130 to 200 points.

It is difficult to rebuild credit after a bankruptcy filing, but not impossible. For example, while you may not be approved for a regular credit card, you can start with a secured credit card. You will still have financial options available to you.

Tax Liens and Judgments

The Consumer Data Industry Association revealed that the changes showed “only modest credit scoring impacts” on consumer reports. Still, millions of Americans had public records wiped from their reports, which was beneficial overall.

While these two types of entries may not be on reports anymore, they can still affect your finances and life in general. For example, a judgment can impact your ability to qualify for a loan or credit. Lenders may check to see if you have outstanding judgments and reject your application. Similarly, the presence of a tax lien may cause a lender to reconsider your application.

What Can You Do About Public Records on Your Credit Report?

If bankruptcy is on your credit report, and all the information is accurate, you can’t do very much to remove it from the account. However, if the bankruptcy data is incorrect, you can file a dispute.

For tax liens and civil judgments, file a dispute to remove these public records from your credit report. You can contact each of the three major credit bureaus by phone or email and ask them to remove the public records from your file.

For more detailed information on how to remove a tax lien, check out this blog post. And for step-by-step instructions on removing a civil judgment from your credit report, refer to this resource.

It’s essential you check your credit report regularly so you can note when new data appears on your report. If a negative item appears and it’s inaccurate, you should dispute it quickly, before it can significantly impact your credit score.

Your Credit Can Recover From Derogatory Marks

Having derogatory marks on your credit report is not a life sentence. With sound financial behaviors, your credit score can recover. You’ll need to make payments on time, get rid of debts and maintain a good credit utilization ratio. If you don’t know where to start, consider credit repair services.

Lexington Law knows how to spot incorrect data on your credit reports and give you helpful credit tips. Credit repair takes time, so it’s essential you start today.


Reviewed by John Heath, Directing Attorney of Lexington Law Firm. Written by Lexington Law.

Born and raised in Salt Lake City, John Heath earned his BA from the University of Utah and his Juris Doctor from Ohio Northern University. John has been the Directing Attorney of Lexington Law Firm since 2004. The firm focuses primarily on consumer credit report repair, but also practices family law, criminal law, general consumer litigation and collection defense on behalf of consumer debtors. John is admitted to practice law in Utah, Colorado, Washington D. C., Georgia, Texas and New York.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

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