On February 2, the U.S. District Court for the District of Nevada granted a motion to dismiss in a case involving allegations of inaccurate credit reporting during bankruptcy proceedings. The court found that the plaintiff, who had filed for Chapter 13 bankruptcy and was actively making payments under a confirmed plan, failed to state a claim upon which relief could be granted against her student loan servicer. The plaintiff alleged that the servicer inaccurately reported an increasing balance on a federal student loan account, which she contended was misleading due to the ongoing bankruptcy and the automatic stay that went into effect upon confirming the servicer’s plan to pursue the plaintiff for personal liability.

The court determined that, under the FCRA, furnishers of information must ensure their reporting is complete and accurate, and concluded that precedent allows the accurate reporting of debts that were delinquent during the pendency of a bankruptcy action. The court cited precedents from the 9th Circuit and other districts, noting that reporting the status of debts — even those governed by a bankruptcy plan — is permissible. Further, the court emphasized that the automatic stay limits collection activity, not credit reporting. The court also rejected the plaintiff’s argument that the servicer’s failure to comply with the “Metro 2 reporting format” established liability under the FCRA. The court stated that the industry guidelines do not set the standards for accuracy. Ultimately, the court dismissed the case with prejudice, concluding that the deficiencies in the complaint could not be remedied by further factual pleading.