How should an account be reported when a borrower files Chapter 12 or Chapter 13 bankruptcy, including situations with co-borrowers who did not file?
When a consumer enters a Chapter 12 or Chapter 13 bankruptcy, furnishers must balance two priorities: (1) reporting accurately and consistently under Metro 2, and (2) avoiding changes that could misrepresent delinquency timing, payment performance, or the effect of the bankruptcy stay. In Metro 2, bankruptcy is primarily communicated at the consumer level through the Consumer Information Indicator (CII), while account-level fields (Account Status, balances, payment history) must remain logical and supportable.
Definitions and context (what matters operationally)
Chapter 12 and Chapter 13 are repayment-plan bankruptcies. A key operational issue is that a non-filing co-borrower can be protected by the automatic stay (depending on the case), which affects how that non-filer should be reported during the plan period. Metro 2 addresses this through:
- Consumer Information Indicator (CII) to reflect petition status and plan outcomes for the filing consumer.
- ECOA Code “T” (Terminated) to temporarily stop reporting a protected non-filer (when applicable).
- Payment History Profile (PHP) handling that preserves the historical record of months affected by the bankruptcy stay, commonly using “D” for months where regular payment performance should not be represented as standard delinquency progression.
Step-by-step reporting standards for Chapter 12 or 13 (all borrowers filed)
1) Month the petition is filed
- Report CII = C (Chapter 12 petition) or CII = D (Chapter 13 petition) for the filing consumer(s).
- Report Account Status, Current Balance, Amount Past Due, and Scheduled Monthly Payment Amount as of the Date of Account Information (your “as of” date for the reporting period).
- Update the PHP in a way that is consistent with your prior month’s reporting.
2) Months during the plan (petition through confirmation and while the plan is active)
- Continue reporting the applicable CII (or leave it blank if your process retains the previously reported CII per your standard approach).
- Common Metro 2 practice for plan months is to reflect the stay period in the PHP by incrementing with “D” (do not “rewrite” prior accurate history to make the file look cleaner).
- For confirmed plans, many furnishers report Amount Past Due = 0 when the plan terms govern repayment and the account is being handled under the court-approved structure.
3) Plan completed outcomes (two common paths)
A. Plan completed and there is no further obligation
- Report CII = G (Chapter 12 completed/discharged) or CII = H (Chapter 13 completed/discharged).
- Align balances and payments to reflect the plan completion outcome (often Current Balance = 0, Amount Past Due = 0, and payments/balances consistent with payoff or discharge treatment).
- After reporting completion for all filing consumers, the tradeline is typically discontinued per the applicable guidance.
B. Plan completed but the account continues (example: mortgage survives and ongoing payments continue)
- Report CII = Q to remove the petition indicator once plan payments are completed, so ongoing performance can be reported normally going forward.
- For the first month after plan completion, many furnishers keep the plan period represented in the PHP using “D” for the months covered by the bankruptcy, then resume normal status progression in subsequent months.
4) Dismissed or withdrawn plan
- Report CII = Q to remove the petition indicator.
- Continue reporting the account normally thereafter, but do not remove the PHP “D” months that reflect the period when the consumer was protected by the stay.
Special handling when there is a non-filing co-borrower
If one borrower files Chapter 12 or 13 and a co-borrower is a non-filer who may be protected by the stay through plan completion, Metro 2 guidance commonly supports:
- Reporting the filer with the appropriate CII (C or D).
- Reporting the non-filer with ECOA Code “T” (Terminated) and then not reporting the non-filer during the plan period.
When the plan completes:
- If the creditor intends to collect from the non-filer after plan completion, the non-filer may be re-reported (no earlier than the timing indicated in your process and consistent with the plan outcome), with an applicable ECOA code that reflects their true relationship (not “T”).
- The PHP for the non-filer’s reappearance should still reflect the bankruptcy-plan months appropriately (often using “D” for the plan period) to avoid implying normal monthly performance reporting occurred during months when the stay applied.
Compliance requirements and consumer impact (FCRA-focused)
Under the FCRA, furnishers have duties to provide accurate information and to correct or update information when necessary. Bankruptcy reporting is a high-risk area for consumer disputes, and the most common dispute triggers include:
- Misplaced CII (wrong consumer, wrong chapter, or not removing it when appropriate).
- Inconsistent PHP updates that suggest delinquency progression during months governed by the stay.
- Re-aging errors or inconsistent delinquency dates that can affect obsolescence timelines and consumer harm.
Conclusion
Accurate Chapter 12 and Chapter 13 reporting in Metro 2 depends on treating bankruptcy primarily as a consumer-level condition (CII) while maintaining account-level fields that are logical and supportable for the reporting period. Use ECOA termination thoughtfully for protected non-filers, preserve the integrity of the PHP during plan months, and remove petition indicators correctly when plans conclude or are dismissed. This approach reduces disputes, supports FCRA accuracy obligations, and improves clarity for both consumers and data users.