Final answer:
The Fair Credit Reporting Act (FCRA) is the federal law that protects clients from inaccuracies on their credit reports, including debts discharged in bankruptcy.
Step-by-step explanation:
The federal law that protects the client whose loan application was denied due to an outstanding debt that was discharged in her Chapter 7 bankruptcy filing is the Fair Credit Reporting Act (FCRA). The FCRA is designed to ensure the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. Under this act, items such as debts that have been discharged through bankruptcy should not be reported as active obligations, and consumers have the right to dispute inaccurate information on their credit reports.