Collection Notice After Discharge?

[Hopeful09]

In October I received a collection notice from a local agency that was hired by my previous credit union.

They were attempting to collect a deficiency balance from the sale of a vehicle we surrendered as part of our Chapter 7. Obviously this is not allowed! I had to fight with them a bit to come to this conclusion - the credit union was claiming that since the debt didn't arise until after my filing date, it was collectable!

So, now that they are no longer trying to collect from me - I have a new problem. The collection is showing up on my credit reports! It is showing on one as being "included in bankruptcy" and on the other as having an "unknown status."

I contacted our attorney who said it really didn't matter as long as it said included in bankruptcy, but I am not so sure of this. Don't collections decrease your credit score? I honestly don't know how they can get away with this!

Any ideas on how to get this fixed?

Thanks!

[Hopeful09]

Anyone? Please help!

I contacted the collection agency today and was basically told to pound sand. The lady I spoke to said that I had caused the bank a loss and they would not remove the collection! She said they had a right to notify the credit bureaus even though I filed bankruptcy on the original debt and the collection didn't occur until after my dishcarge.

How can this be? My car payment was always on time, the car was surrendered in bankruptcy, and then the deficiency went to collections? I have all of the documentation to support my claim!

Can this happen on all my debts? Can I be sent to collections after discharge if the collection notice is sent after my filing date...what's the point of bankruptcy then?

Sorry for my rambling - I'm just feeling very frusterated!

[AngelinaCatHub]

I understand your frustration, you could write them and tell them you will bring charges against them with the bk Court.

What can the debtor do if a creditor attempts to collect a discharged debt after the case is concluded?

If a creditor attempts collection efforts on a discharged debt, the debtor can file a motion with the court, reporting the action and asking that the case be reopened to address the matter. The bankruptcy court will often do so to ensure that the discharge is not violated. The discharge constitutes a permanent statutory injunction prohibiting creditors from taking any action, including the filing of a lawsuit, designed to collect a discharged debt. A creditor can be sanctioned by the court for violating the discharge injunction. The normal sanction for violating the discharge injunction is civil contempt, which is often punishable by a fine.

http://www.uscourts.gov/bankruptcycourts/bankruptcybasics/discharge.html#collect

[justbroke]

'Hub is right. There are many cases in which the BK Court determined that placing and refusing to remove a negative entry on a credit report was, in fact, an attempt to collect the debt!

You need to work with your attorney, since they won't listen to you. If your attorney won't budge, ask him for an attorney that will work on contingency to re-open the case and file for Sanctions.

Of course, this is all if you want to pursue this and spend the $260 on re-opening your case to pursue it. If you're successful in the sanctions, you'll recover your money. It might be worth it, if you had no other negative entries on your credit report. Collection Accounts do affect your credit.

[whipster1]

I would re-open the case, or have your attorney threaten to re-open the case and go after them. It will be worth it to you and to your attorney, because he gets all his fees paid by the CU and the collector. Keep good records and tape record everything if allowed by your state.

I foresee $$$ in your future!!

[Hopeful09]

Thank you so much for your input. My attorney, although helpful in the actual BK process, is less than thrilled to hear from me now. I emailed her in October about this and she sent me a bunch of documentation and even offered to contact the Collection agency for me. I told her not to worry about it and I sent the information in myself. The collection agency said they'd fix the issue. I thought this was taken care of until I checked my credit report because we wanted to *try* to get a small car loan and saw that this was still there.

I contacted the attorney again - she said basically it didn't matter because it was included in BK and they were no longer trying to collect even though it still shows open on at least one of my credit reports. She was incredibly short with me on this - obviously her concern is the discharge and not my credit report.

What do you all think of this plan:

1) Dispute the reporting to all 3 bureaus by certified mail and include copies of the discharge paperwork and the collection notice. This will show that the collection was started after my dishcarge. I've already tried to dispute online and the account came back verified - I'm hoping that by doing this in writing it will make a difference. (?)

2) If this doesn't work - contact the credit union directly and point out this error in writing. In addition to this collection they are also reporting the original account after my filing date as being 90 days late - it was NEVER late, EVER, and shouldn't report after filing from what I understand.

3) If none of this work's then try to reopen the case...just such a cruddy chapter of life that I don't want to relive. ]

Thanks.

[justbroke]

That sounds like a plan. I think you'll still be at step 3 in the end. I would still take your attorney's offer to write a letter to the collection agency.