Credit-Repair Scams and False "New Credit Identity" Claims

How does credit reporting after bankruptcy actually work?

Two things matter here, and scam pitches depend on you not knowing either. First, the bankruptcy court itself does not send anything to the credit bureaus. Bankruptcy filings are public records, and credit reporting agencies collect that information from the public court record on their own. The court has no control over what the bureaus do with it and does not verify or validate consumer files (Bankr. W.D. La. official page — FAQs; CANB official page — How do I get a bankruptcy case removed from my credit report?).

Second, the time limit comes from the Fair Credit Reporting Act, not from anything a company can negotiate. A consumer reporting agency generally may not issue a report containing a case under title 11 that antedates the report by more than 10 years from the date of entry of the order for relief (15 U.S.C. § 1681c(a)(1)). No service speeds that clock up. A company promising early removal of an accurate filing is promising something the statute does not provide.

• The court does not furnish information to credit bureaus.
• Bureaus gather filings from public records, including PACER.
• The reporting limit is set by statute, not by negotiation.

What are the warning signs of a credit-repair scam?

Scam offers cluster around a few recognizable promises. The strongest signal is any claim to remove accurate negative information, because the dispute process in federal law is about accuracy and completeness, not about erasing true history. If an item is correct, the reinvestigation route in 15 U.S.C. § 1681i is not designed to delete it.

A second signal is a pitch to create a separate identity for credit purposes. A third is a business that helps with bankruptcy but will not put its services and fees in writing, which federal law requires of a debt relief agency (11 U.S.C. § 528(a)(1)). A fourth is advice to take on more debt before filing: a debt relief agency may not advise you to incur more debt in contemplation of filing (11 U.S.C. § 526(a)(4)).

Is a CPN or "new credit identity" legal?

Sellers of these products use several names: credit privacy number, credit profile number, or simply a "new credit file." The pitch is that you can apply for credit using a different number instead of your Social Security number and leave your history behind. Nothing in federal consumer-report law provides for that, and the consequences run in the opposite direction from what buyers expect.

Using a false identifier on a credit application means the application contains false information. In bankruptcy, a debt obtained by false pretenses, a false representation, or actual fraud, or by a materially false written statement about your financial condition that a creditor reasonably relied on, may be excepted from discharge (11 U.S.C. § 523(a)(2)). So a purchase meant to help your credit can create exactly the kind of debt a later bankruptcy filing does not resolve. Filing under a fictitious name is also identified as a bankruptcy crime in official trustee guidance (USTP Buenas prácticas para asistir a reuniones virtuales de acreedores de la Sección 341(a)).

• The names change; the product is the same substitute identifier.
• Debts obtained by false representation may be excepted from discharge.
• Official guidance treats filing under a fictitious name as a crime.

What does federal law say a debt-relief business must give you?

If a business provides bankruptcy assistance to an assisted person, it is subject to specific federal duties, and the paperwork it hands you is a useful test of whether it is legitimate. Within 5 business days of first providing services, and before your petition is filed, it must execute a written contract that clearly explains the services and the fees, and it must give you a copy (11 U.S.C. § 528(a)(1)-(2)).

It must also provide written notices telling you that everything you file must be complete, accurate, and truthful, that all assets and liabilities must be disclosed, and that information you provide may be audited, with failure to provide it risking dismissal or other sanction, including a criminal sanction (11 U.S.C. § 527(a)(2)). Advertising must disclose that the services concern bankruptcy relief and carry the statement "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code." or something substantially similar (11 U.S.C. § 528(a)(3)-(4)).

• Written contract, executed before the petition is filed.
• A copy of that contract for you to keep.
• Written notices about accuracy, disclosure, and audit risk.
• A required disclosure statement in public advertising.

Where do state or local rules differ?

Bankruptcy is federal. Each of the 94 federal judicial districts handles bankruptcy matters, cases cannot be filed in state court, and federal courts have exclusive jurisdiction (Bankruptcy Administrator for the Northern District of Alabama, Understanding Bankruptcy). The credit-reporting rules discussed here are federal as well, so the answers above do not change when you cross a state line.

What does vary locally is enforcement and the identity of the people already found to have abused the process. Some districts publish lists of individuals and entities barred by court judgment from helping anyone prepare bankruptcy papers, and those named may not take money for that help (Bankr. E.D. Mich. official guidance — Notice about Prohibited Bankruptcy Petition Preparers). Local court rules, forms, and fees also differ. Your state page and the court finder can point you to the district that covers your county before you pay anyone anything.

• Bankruptcy jurisdiction is exclusively federal.
• Some districts publish lists of barred petition preparers.
• Local rules, forms, and procedures still vary by district.

What does this look like in practice?

A common sequence starts with a mailer or a call after a judgment or a garnishment shows up. The company offers a monthly fee to "clean" the file, then adds an upsell: a number that lets you start over. The pricing is often framed against what a lawyer would cost, which is why it helps to know the real filing figures. The Chapter 7 filing fee is $245 (28 U.S.C. § 1930(a)(1)(A), (f)(1)), plus a $78 administrative fee and a $15 trustee surcharge (Bankruptcy Court Miscellaneous Fee Schedule, Items 8 and 9). The Chapter 13 filing fee is $235 (28 U.S.C. § 1930(a)(1)(B)) plus the same $78 administrative fee.

Meanwhile the dispute route the scam is charging for is free. A consumer reporting agency must conduct a reasonable reinvestigation free of charge when you notify it of a dispute (15 U.S.C. § 1681i(a)(1)(A)). Paying a monthly fee for a free process is the quiet version of the same problem.

• The upsell usually arrives after the first monthly payment.
• Court filing fees are published and knowable in advance.
• The dispute process itself costs nothing.

What documents or information are involved?

Keep the paperwork, because it is both your protection and your evidence. From any business offering bankruptcy assistance, that means the written contract explaining services and fees and the separate written notices, both of which federal law requires it to give you (11 U.S.C. §§ 527, 528). A contract that does not comply with the material requirements of those sections is void and may not be enforced against you (11 U.S.C. § 526(c)(1)).

For a credit-report problem, you need a current copy of the report, the specific item you believe is inaccurate or incomplete, and a written dispute sent to the agency. The agency must notify the furnisher of the dispute before the end of the 5-business-day period after it receives your notice (15 U.S.C. § 1681i(a)(2)(A)). Courts direct consumers with credit-report questions to the Federal Trade Commission and the Consumer Financial Protection Bureau, which publish guidance on disputing data (CANB official page — How do I get a bankruptcy case removed from my credit report?).

• Every contract, receipt, and advertisement from the company.
• The written notices a debt relief agency must provide.
• Your credit report and the exact items in dispute.
• Dates: when you paid, when you disputed, when they replied.

What should you ask a lawyer?

Bring the documents and ask questions that turn on facts in your file rather than on general advice. Useful ones include: does anything I already did with this company create a problem in a bankruptcy case; are any of my recent debts at risk of a discharge exception under 11 U.S.C. § 523(a)(2); and is a chapter filing or a credit-report dispute the more direct route for the specific items hurting me.

It is also worth asking about money you already paid. A debt relief agency may be liable to an assisted person for the fees or charges it received, for actual damages, and for reasonable attorneys' fees and costs, after notice and a hearing, if it intentionally or negligently failed to comply with §§ 526, 527, or 528 (11 U.S.C. § 526(c)(2)). If you suspect bankruptcy fraud or someone promised debt help and did not deliver, the U.S. Trustee Program publishes a route for reporting it (USTP Consumer Information).

• Does anything I signed create a discharge problem?
• Can I recover fees I already paid to this company?
• Is a dispute or a filing the better next step for my file?
• Which district covers me, and what are its local requirements?

Frequently asked questions

Can anyone remove an accurate bankruptcy from my credit report early?

No service can shorten the statutory reporting window. A consumer reporting agency generally may not report a title 11 case that antedates the report by more than 10 years from the date of entry of the order for relief (15 U.S.C. § 1681c(a)(1)). The bankruptcy court does not report to bureaus and does not verify consumer files, so it cannot remove an entry either.

How long does a reinvestigation of a disputed item take?

When you notify a consumer reporting agency of a dispute, it must conduct a reasonable reinvestigation free of charge before the end of the 30-day period beginning on the date it receives your notice (15 U.S.C. § 1681i(a)(1)(A)). That period may be extended for not more than 15 additional days if you send relevant information during the initial 30 days.

Is buying a CPN a way to start over after bankruptcy?

Nothing in the federal law covered here creates a lawful substitute credit identifier. Using false information to obtain credit can produce a debt excepted from discharge under 11 U.S.C. § 523(a)(2), meaning a later bankruptcy may not resolve it. Official trustee guidance also lists filing under a fictitious name among bankruptcy crimes carrying severe criminal penalties.

What written documents must a bankruptcy-assistance company give me?

A written contract explaining the services and the fees and terms of payment, executed within 5 business days of first providing services and before your petition is filed, plus a copy for you (11 U.S.C. § 528(a)(1)-(2)). It must also provide written notices about accuracy, full disclosure of assets and liabilities, and audit risk (11 U.S.C. § 527(a)(2)).

What happens if the company never gave me a contract?

A contract for bankruptcy assistance that does not comply with the material requirements of 11 U.S.C. §§ 526, 527, or 528 is void and may not be enforced against you by any court or person (11 U.S.C. § 526(c)(1)). The agency may also be liable for the fees it received, actual damages, and reasonable attorneys' fees and costs after notice and a hearing (11 U.S.C. § 526(c)(2)).

How much does it cost to file, compared with paying a repair service?

The Chapter 7 filing fee is $245, plus a $78 administrative fee and a $15 trustee surcharge. The Chapter 13 filing fee is $235 plus the same $78 administrative fee. Courts also allow installment requests in some circumstances. Those figures are published, unlike open-ended monthly repair charges, and the credit-report dispute process itself is free.

Who do I tell if I think I was scammed?

The U.S. Trustee Program publishes consumer information for people who suspect bankruptcy fraud or abuse of the bankruptcy process, including situations where someone promised debt help and did not deliver. For credit-report data problems, courts point consumers to the Federal Trade Commission and the Consumer Financial Protection Bureau, which publish guidance on disputing information in a credit file.

Sources

• 15 U.S.C. § 1681c — Requirements relating to information contained in consumer reports
• 15 U.S.C. § 1681i — Procedure in case of disputed accuracy
• 11 U.S.C. § 526 — Restrictions on debt relief agencies · official source
• 11 U.S.C. § 527 — Disclosures · official source
• 11 U.S.C. § 528 — Requirements for debt relief agencies · official source
• 11 U.S.C. § 523 — Exceptions to discharge · official source
• 28 U.S.C. § 1930(a)(1)(A), (f)(1) · official source
• 28 U.S.C. § 1930(a)(1)(B) · official source
• Bankruptcy Court Miscellaneous Fee Schedule, Item 8
• Bankruptcy Court Miscellaneous Fee Schedule, Item 9
• CANB official page — How do I get a bankruptcy case removed from my credit report? | United States Bankruptcy Court
• Bankr. W.D. La. official page — FAQs
• Bankr. E.D. Mich. official guidance — Notice about Prohibited Bankruptcy Petition Preparers
• Bankruptcy Administrator for the Northern District of Alabama, Understanding Bankruptcy
• USTP Consumer Information
• USTP Buenas prácticas para asistir a reuniones virtuales de acreedores de la Sección 341(a)

Related

• Build your personalised roadmap
• Filing Cost Calculator: What Bankruptcy Actually Costs to File
• Find your local bankruptcy court
• What happens after your bankruptcy discharge
• Find a Bankruptcy Lawyer by State
• Statutes and rules library