How long are banks legally allowed to keep negative credit history?

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How long are banks legally allowed to keep negative credit history?

I made a payment on a current car loan to a local bank 2 days before the payment was due. Somehow they applied the payment to an old loan I filed bankruptcy on over 16 years ago (it wasn’t even with their bank). I have been fighting with them for almost 3 weeks to get them to properly apply the payment to the correct loan. This dept was dissolved over 16 years ago. Are they allowed to kept this information for this long if the loan was not with them bank? Do I have any legal recourse for harassment from there constant calls claiming I havn’t made my car payment?

Asked on April 17, 2011 under General Practice, Minnesota

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

I think that you are taking the wrong approach here with your question.  If the prior debt was discharged in bankruptcy then this bank has no legal right to keep your money and apply it to the prior loan.  In fact, they have no authorization - by you or legally through a judgement - to apply it to anything but the present loan. They could be elephants and never "forget" about the old loan but it does not matter.  So I would start making a huge fuss with the state banking commission and with the state attorney general's office.  Start filing complaints.  The bank with sit up and take notice about the matter then.  Good luck to you. 


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