Wells Fargo Bankruptcy Credit Reporting Settlement: $3 Million, Closed Since 2022

Olufunmilayo Ajasa filed the case on November 8, 2018 as an adversary proceeding in the U.S. Bankruptcy Court for the Eastern District of New York, on behalf of herself and a proposed nationwide class. According to Bankruptcy Judge Elizabeth S. Stong's April 7, 2021 decision, she claimed Wells Fargo had a systematic practice of violating the bankruptcy discharge injunction by failing to update information it gave to credit reporting agencies to show that discharged debts were no longer owed. Joseph Lopez joined as a second plaintiff in 2019.

The archived official settlement website described the settlement as covering Wells Fargo's credit furnishing practices on accounts sold to debt buyers where the customer got a Chapter 7 discharge after the sale. The lawsuit alleged those practices hurt consumers' ability to get credit or pressured some into paying debts that had been wiped out. Wells Fargo denied any liability or wrongdoing and agreed to pay $3 million.

Under 11 U.S.C. section 524(a)(2), a bankruptcy discharge operates as an injunction against any act to collect a discharged debt as a personal liability of the debtor. Inaccurate credit report entries after bankruptcy are a common source of lawsuits under both bankruptcy law and the Fair Credit Reporting Act.

According to the archived settlement website, the class covered Wells Fargo credit card, direct auto, home equity line of credit (HELOC), and personal line accountholders whose accounts were sold to debt buyers and who then obtained a Chapter 7 bankruptcy discharge.

• The debt had to have been sold by Wells Fargo to a debt buyer before the bankruptcy discharge.
• The bankruptcy had to be Chapter 7, not Chapter 13.
• Mortgages were not among the account types listed.

The settlement's detailed class definition, including the exact date range, was in the notice on the now-offline website, which we could not retrieve. Class members were identified from Wells Fargo's records, and notices were handled by Rust Consulting, the settlement administrator.

The official website said Wells Fargo agreed to pay $3 million to cover class member claims, settlement administration costs, and a service payment to the class representative. Payment went only to class members who submitted a claim form by March 21, 2022; the website listed filing a claim as the only way to get a payment.

No per-person figure was published on the official website before it went offline, and we could not find a verified report of the final amounts paid. The court granted class counsel's motion for attorneys' fees and the plaintiff's incentive award in an order signed April 25, 2022. See how class action money is divided for how these funds are typically split.

The final approval hearing was held by U.S. District Judge Eric N. Vitaliano, joined by Bankruptcy Judge Stong, in case No. 1:21-cv-07085 in the Eastern District of New York. As of September 2026, the settlement website is offline. Because the judgment was entered in April 2022, we treat the distribution as complete, but we could not confirm the exact payment date from an official source. See what to do if you never received a settlement check.

The Ajasa deadline is long past, and class members who did not opt out released the claims it covered. But the problem it addressed still happens. If a debt you discharged in bankruptcy shows as due, past due, or collectible, you can act now:

1. Pull your free reports from all three bureaus and find the account.
2. Dispute it with each bureau, attaching your discharge order and the bankruptcy schedule listing the debt. Our guide on disputing a credit report error walks through it.
3. Keep copies of every letter, response, and any collection attempt.
4. If the error is not fixed, or a collector demands payment on a discharged debt, you may have claims under the FCRA or for violating the discharge injunction. See the FCRA explained and our page on credit report error lawsuits.

The FCRA allows statutory damages of $100 to $1,000 per consumer for willful violations, plus actual damages and attorneys' fees. A free case review can connect you with independent attorneys who handle credit reporting and bankruptcy discharge cases.

Other credit reporting settlements include the Wells Fargo CARES Act forbearance reporting settlement, the TransUnion inaccurate report settlement, and the Equifax credit reporting settlement. For cases still accepting claims, see our open settlements page.