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What concerns should I have as a result of incorrect answer on my credit application regarding having a BK in the last 14 yrs?
Anonymous2 views2 answers
I recently applied for a HELOC, an auto loan refinance and credit card and was approved for all three but am noticing as I'm filing the documents for the new accounts that there's an inaccuracy on 2 of the 3 applications. The credit union rep had the paperwork pre-filled out and I didn't notice that the pre-filled in answer wasn't correct. The application for the HELOC asked if I had filed BK in the last 10 yrs and it was correctly marked "no" by the loan officer who pre-filled out the paperwork because the BK (over 10 years ago) didn't show on my credit report. But I'm seeing here that the auto loan and credit card applications asked if I had a BK in the last 14 yrs, instead of 10 years, so the answer should've been yes. I'm confident I would have still qualified for the accounts but now I'm concerned about what I should do now that the accounts are established and I'm seeing it on a review of the paperwork, which was signed a few weeks ago. I don't want it ever to come back on me, because I didn't intend for the application to be inaccurate. I guess I could inform the credit union. I don't plan to default on the loans, so maybe it is a non-issue unless something goes wrong.
Depends on whether you signed the applications under oath or not.
Frankly a 14 year old bankruptcy (or older) is irrelevant for underwriting purposes. However, that said its impossible to answer this question.
I would suggest you re-review the statements you did sign and see if they were under oath. If not, then it seems to me there's nothing to grouse about.
As a measure of caution, you should click on "Find a Lawyer" above and locate a debt collection defense lawyer in your area to consult with about this matter and solid legal advice.
In theory, if the bank learned of the issue and determined it to be material, they could cancel your loans and require you to immediately return the money they loaned to you on the two loans with the application discrepancies. In reality, however, this is not going to happen.
First, if you make all your payments as agreed, the bank will never care about the loan applications and will be extremely pleased. There is very little chance that any of this will ever come up unless you default on the loans or file a new bankruptcy.
If you do default on the loans or attempt to discharge the debts in bankruptcy then the bank could review the applications and could argue that the loans were obtained through fraud. However, to succeed the bank would have to prove that the misstatement was material - that they wouldn't have given you the loan if they knew that you filed bankruptcy more than 10, but less than 14 years ago. This does not sound like a reasonable argument.
The bottom line is that you should pay your debts as agreed as much as possible and read future paperwork more carefully before you sign it, but this isn't likely to be a problem for you.
