Charged-Off Accounts PRIOR to BK - how do they have to report after discharge?

[IBroke]

Hi folks,

Can anybody tell me how accounts from original creditors that were either charged-off or sold to somebody else prior to filing BK are supposed to be reported once discharged?

I already know that they can still be reported as "charge-off" but shouldn't they say "IIB" as well? I have at least a dozen of old accounts that were either charged-off and/or sold to somebody else that don't mention "IIB" although their debt was indeed "IIB" - just not the OC.

Thanks for any input!

[daxtell]

i was wondering this myself because i also have several that way. and they still show the high balance or credit limit amount which i thought needs to go because those amounts i was under the impression that impacted the score. (if you had too much). anyway, i disputed the amounts on my credit report recently to say they were included in bankruptcy and am still awaiting responses from them to see how they respond.

[IBroke]

i was wondering this myself because i also have several that way. and they still show the high balance or credit limit amount which i thought needs to go because those amounts i was under the impression that impacted the score. (if you had too much). anyway, i disputed the amounts on my credit report recently to say they were included in bankruptcy and am still awaiting responses from them to see how they respond.

Yeah, they still report the "high credit" but I don't think that impacts the credit since they are closed and show a current $0 balance (at least that's how charge-offs are supposed to report).
I previously disputed these accounts and requested a "general update" on these accounts but they came back unchanged. Experian did report these accounts as "IIB" after my dispute but the other two didn't.

I also have an account that was a second mortgage which was transferred as well. The status on Experian says "IIB" and on the other two, they report a CURRENT status of "120+ days late" as if I would owe them money right now. Being considered "currently late" on an account that was closed/transferred in 2007 AND discharged in bankruptcy really s**ks big time!

[PHXDWTN]

I just picked up my BK case docket at the court today and included was a "Notice Recipients" which lists everyone who was included in the discharge of the BK.
Comparing this with my credit reports, the accounts that were Charged-Off/Sold/Transfered are not included on this list. The accounts that had a balance owed/were in collections are on the list. I'm hoping it wasn't a mistake when the BK was filed (did it through attorney) that these weren't included or maybe they were not included on purpose since there was $0 owed on the accounts.

[IBroke]

I just picked up my BK case docket at the court today and included was a "Notice Recipients" which lists everyone who was included in the discharge of the BK.
Comparing this with my credit reports, the accounts that were Charged-Off/Sold/Transfered are not included on this list. The accounts that had a balance owed/were in collections are on the list. I'm hoping it wasn't a mistake when the BK was filed (did it through attorney) that these weren't included or maybe they were not included on purpose since there was $0 owed on the accounts.

That is the point where we have to be careful: Those charge-offs were reported as $0 but that does NOT mean that there was $0 owed. If the account was sold and transferred, you still owe money on that ACCOUNT - but not to that particular CREDITOR who reports a $0 balance.

The original CREDITORS weren't included in my BK-petition either - simply because they transferred the accounts/debt to somebody else. Those are the ones listed. However, that shouldn't make a difference because you don't discharge creditors. The account and debt (or the personal liability for it, to be exact) ORIGINATING FROM the origianal creditor was in fact discharged - no matter who handled the account the day you filed. That's why I think accounts transferred post-BK should say "IIB" as well.

[daxtell]

IBroke: I have a second mortgage that reads exactly the way yours does too. I disputed that one too. Hope something is changed. But from your results sounds like it might not.

PHXDWTN: My attorney had me list the original creditor and address and then the name and address of all the companies my debts were transferrred too one by one. And a notice was sent to every single one of them old and new buyers.

[PHXDWTN]

That is the point where we have to be careful: Those charge-offs were reported as $0 but that does NOT mean that there was $0 owed. If the account was sold and transferred, you still owe money on that ACCOUNT - but not to that particular CREDITOR who reports a $0 balance.

The original CREDITORS weren't included in my BK-petition either - simply because they transferred the accounts/debt to somebody else. Those are the ones listed. However, that shouldn't make a difference because you don't discharge creditors. The account and debt (or the personal liability for it, to be exact) ORIGINATING FROM the origianal creditor was in fact discharged - no matter who handled the account the day you filed. That's why I think accounts transferred post-BK should say "IIB" as well.

I think the confusion here is accounts and debt. I don't think accounts = debts.
The original creditors closed the account and sold/transfered the debt. They did not sell the account or transfer it. The debt collector that bought the bad debt has their own account number associated with it. That's the way I'm reading it.

I have something similar going on with a judgment which sort of is the same thing. I had/have a judgment that was included in the bankruptcy and the debt on that judgment is now $0 but the judgment is still out there and recorded with the County Recorder's Office. I inquired about it and was told that the BK discharged the debt but it does not get rid of the judgment file itself. I have to file a Motion to Dismiss Judgment with the court separately from the BK if I want to get that cleared.

[IBroke]

I think the confusion here is accounts and debt. I don't think accounts = debts.
The original creditors closed the account and sold/transfered the debt. They did not sell the account or transfer it. The debt collector that bought the bad debt has their own account number associated with it. That's the way I'm reading it.

I have something similar going on with a judgment which sort of is the same thing. I had/have a judgment that was included in the bankruptcy and the debt on that judgment is now $0 but the judgment is still out there and recorded with the County Recorder's Office. I inquired about it and was told that the BK discharged the debt but it does not get rid of the judgment file itself. I have to file a Motion to Dismiss Judgment with the court separately from the BK if I want to get that cleared.

I have a judgment-scenario as well and filed a Motion to Vacate last Friday. Based on what I read after that, I don't keep my hopes up very high that I can actually get it vacated.

The credit-reporting with OCs and/or collection-agencies are a different scenario though.

The debt itself from accounts discharged through bankruptcy isn't even gone. Your liability for it is discharged and nobody can collect it. The debt actually remains.
Credit reporting, however, is a form of debt collecting and by NOT indicating that a charged-off account ultimatively was IIB, it still appears to be a debt. Judgments are still reported after a discharge - but as you already pointed out, those judments will receive the "IIB"-notation on your credit-file.

The fact that the account-number might have changed during a transfer has no legal effect. It is the same debt and in the end, it was discharged. Even if you list both account-numbers on your petition, your debt won't double and it will only be discharged once. It is correct that OCs transferred or sold the debt - but they are still reporting on an account they don't handle any more. That doesn't mean they aren't required to report ACCURATE information. Yes, they charged-off the debt but it was IIB as well. That's accurate, too.

[locolady]

I think the confusion here is accounts and debt. I don't think accounts = debts.
The original creditors closed the account and sold/transfered the debt. They did not sell the account or transfer it. The debt collector that bought the bad debt has their own account number associated with it. That's the way I'm reading it.

I have something similar going on with a judgment which sort of is the same thing. I had/have a judgment that was included in the bankruptcy and the debt on that judgment is now $0 but the judgment is still out there and recorded with the County Recorder's Office. I inquired about it and was told that the BK discharged the debt but it does not get rid of the judgment file itself. I have to file a Motion to Dismiss Judgment with the court separately from the BK if I want to get that cleared.

Question if the debt is included and discharged, (meaning the dollar amount ask for in the suit) what is left to enforce under said judgment. If no lien order was filed or garnishment was order why would I need to Dismiss the judgment after my BK-7 discharges? I have one judgment that was approve by the court a month before I filed but no lien on home or garnishment was started and it is not on my credit file just on the courts web site.

[PHXDWTN]

Answer is...there is nothing left to enforce, but that "paper" is still out there and you could get questioned by some creditor later on.

In my situation, I am trying to sell a house and they did a search and found there is a judgment out there against me. The title company must have called the debt collector's attorney because they got back to me saying I need to pay $10,500 prior to closing.

It's total BS and is being sorted out but basically the judgment is still "out there" and even though there is no amount attached to it to collect, the debt collector wants $10,500 to release the judgment itself. Total BS but I guess legal and I guess it's something that the BK does not get rid of since the BK's purpose (as I was told) was to discharge you of the debt, which it did. It doesn't do anything to actually discharge the filed judgment.

I filed my Motion today and am quite hopeful. What I wrote on the Motion is...

"I would like the court to: Vacate the judgment due to the fact that the underlying debt that created the judgment was discharged under Chapter 7 bankruptcy on 01/080/10 Case No. xx-xxx."

When I went into court with it, the clerk seemed to know exactly what it was and seemed as if she had seen this done many times, very routine. She looked it over, made sure I had a copy of the BK discharge as well as a list of creditors/debt collectors included and said "Since bankruptcy was filed on this, then the judge won't even need to wait for an answer back to the Motion and should be able to sign off on it within 1-2 weeks."

[IBroke]

I filed my Motion today and am quite hopeful. What I wrote on the Motion is...

"I would like the court to: Vacate the judgment due to the fact that the underlying debt that created the judgment was discharged under Chapter 7 bankruptcy on 01/080/10 Case No. xx-xxx."

When I went into court with it, the clerk seemed to know exactly what it was and seemed as if she had seen this done many times, very routine. She looked it over, made sure I had a copy of the BK discharge as well as a list of creditors/debt collectors included and said "Since bankruptcy was filed on this, then the judge won't even need to wait for an answer back to the Motion and should be able to sign off on it within 1-2 weeks."

That sounds positive. My judgment wasn't attach to anything, too, because I didn't own any property of value since then. Here's what I wrote in my motion:

IN THE CIRCUIT COURT
IN AND FOR XXX COUNTY, STATE OF FLORIDA




XXX.,

Plaintiff,

Case No.: XXXXX
vs.


(me),

Defendant(s).

____________________________________/


DEFENDANT’S MOTION TO VACATE JUDGMENT


Comes now the defendant, (me), hereby files his motion to vacate final judgment, pursuant to Rules 1.540(b) Fla. R. Civ. P., states:

Florida Rule of Civil Procedure 1.540(b) provides in pertinent part:
On motion and upon such terms as are just, the court may relieve a party or a
party’s legal representative from a final judgment, decree, order, or proceeding
for the following reason:… (5) that the judgment or decree has been satisfied, released, or discharged, or a prior judgment or decree upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or decree should have prospective application.

The defendant, (my name), filed for Chapter 7 Bankruptcy on the 24th day of September, 2010, Case No.: XXX, and received his Final Decree of discharge from the United States Bankruptcy Court, XXX, on the 6th day of January, 2011. The judgment was included in the defendant’s Bankruptcy Petition and was discharged.


WHEREFORE, Defendant requests this court grant Defendant’s motion for
vacating judgment.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing was served via
regular U.S. Mail to: XXX on this 11th day of February, 2011.

[PHXDWTN]

Quite lengthy but sounds good. In Arizona, they actually have a form to fill out so it's pretty straight forward, you just write your request in the "I would like the court to:" area of the form.

Why are you not positive about the outcome of yours?

[IBroke]

Quite lengthy but sounds good. In Arizona, they actually have a form to fill out so it's pretty straight forward, you just write your request in the "I would like the court to:" area of the form.

Why are you not positive about the outcome of yours?

Based on the info of this thread:

http://www.bkforum.com/showthread.ph...gment-after-BK

Unfortunately, there are no standard forms for that in Florida.