Refiling Ch 13 to get rid of 'debt buyers'

[Mary Irene]

I filed for Ch 13 in 2006 and was confirmed. During the waiting period for creditors to send in proofs of claim, I noticed several creditors I didn't recognize, specifically, B-Real,LLC, E-Case Settlement, Round-up Funding. I asked my lawyer about it and she said that it was just someone representing my creditor. I thought that was wierd since all my credit cards were charged off and sold. It took me several years, but I finally found out that these are companies that buy bankruptcy debt. Recently, a court ruled against them and dismissed their claims due to their not being able to present their proof of claim. I am close to paying off my secured and priority claims, and my Ch 13 is a 100% repayment plan. What I would like to do is drop the Ch 13 when the last priority is paid, and then refile in 6 months and make these companies present their proof of claim. I have an issue paying these people who bought my bankruptcy debt for 6 cents on the dollar. Does anyone have any advice for me on doing this? Thanks so much.

[arkienurse]

I filed for Ch 13 in 2006 and was confirmed. During the waiting period for creditors to send in proofs of claim, I noticed several creditors I didn't recognize, specifically, B-Real,LLC, E-Case Settlement, Round-up Funding. I asked my lawyer about it and she said that it was just someone representing my creditor. I thought that was wierd since all my credit cards were charged off and sold. It took me several years, but I finally found out that these are companies that buy bankruptcy debt. Recently, a court ruled against them and dismissed their claims due to their not being able to present their proof of claim. I am close to paying off my secured and priority claims, and my Ch 13 is a 100% repayment plan. What I would like to do is drop the Ch 13 when the last priority is paid, and then refile in 6 months and make these companies present their proof of claim. I have an issue paying these people who bought my bankruptcy debt for 6 cents on the dollar. Does anyone have any advice for me on doing this? Thanks so much.

Have you talked to your lawyer about your plan? My understanding is that the creditors whose claims are disallowed are just SOL ( s*** out of luck). Once your bk is discharged at the completion, they can NEVER collect on this debt, as it doesn't legally exist anymore. Key is though, you have to stick it through to completion- if you dismiss, they could come after you for the money.
But please ask your lawyer to make sure this is the case. And if this is right, and they are contacting you for payment, then they are violating the automatic stay and could actually end up paying you money if your lawyer will pursue it.

[Mary Irene]

I think you misunderstood me. What I want to do is dismiss my case voluntarily and then refile to remove several claims that are not from my original creditors (Chase, Sam's, etc), but were from bankruptcy buyers (B-Real,LLC, etc). I could not dispute their claims when they first came in because my attorney assumed they were representing Chase and Sam's club. I feel I was not given the chance to do this and the only way I know of to fix it is to dismiss this case and file a new one and make them show the proof of claim (which I know they don't have).

[Mary Irene]

By the way, the following line did not apply to me, it was something I had to look up online to find out if this type of case had a presedence: "Recently, a court ruled against them and dismissed their claims due to their not being able to present their proof of claim." What happened there was that a debtor had sued B-Line (same company) because they could not produce a proof of claim against them, and the judge ruled in favor of the debtor because although they had the paper saying they bought the debt, they did not have a link from the original creditor to themselves (as it had gone through several debt buyers).

[arkienurse]

I think you misunderstood me. What I want to do is dismiss my case voluntarily and then refile to remove several claims that are not from my original creditors (Chase, Sam's, etc), but were from bankruptcy buyers (B-Real,LLC, etc). I could not dispute their claims when they first came in because my attorney assumed they were representing Chase and Sam's club. I feel I was not given the chance to do this and the only way I know of to fix it is to dismiss this case and file a new one and make them show the proof of claim (which I know they don't have).

no I don't understand I guess. Are you saying chase and sams club filed a proof of claim and then sold the debt to a 3rd party that also filed a proof, so now you have to pay both of them? Then I would definitely be on my lawyer's doorstep Monday morning.

However, if chase and sams club received notice of your bk, and then sold the debt to the 3rd parties and the 3rd parties filed the claim, I must let you know that happens all the time. If they bought the debt, then they probably have a valid claim.
In my own case, over half the creditors sold my debt to 3rd parties, who were then paid what the original creditor would have received. Several of my creditors- Walmart MC and AmEx sold the debt immediately and never filed their claims, but the 3rd party did. The original creditor received nothing from us, only the 3rd party. And one of my claims changed hands 3 times during my bk.

Please do run this by your lawyer and see what they say.

[BKParalegal]

I understand what you are saying and here are some issues. You do not want to dismiss your Chapter 13, but actually convert it to a 7, that is much easier and does not bring up the issue of abusive filing for being a repeat filer. If you were to dismiss the 13 and refile as a 7( which I wouldn't) it wouldn't matter what claims were filed by them, since they are all dischargeable. The thing you want to make sure is that all of your secured/priority debts have been satisified before you convert(there are some funky rules about converting as well, especially regarding your Schedule I and J, you need to show why you can't afford the payments when you were able to before)please read my disclaimer

[BKParalegal]

PS I love advice on here saying "go talk to your attorney", I can only assume that they know that option. They are here to get some additional insight to their situation. Just give your insight or opinion and then stop short about the "talk to your attorney" or why don't you add all the obvious advice, like:

" So my advice is go talk to your attorney, and in the future try not to spend more than you can afford on stuff, and make sure you have proper medical insurance so as not to accrue large medical debt, and lastly don't let life throw you any curve balls that you can't handle. I would strongly advise to avoid those especially" Good luck ;)

[Mary Irene]

no I don't understand I guess. Are you saying chase and sams club filed a proof of claim and then sold the debt to a 3rd party that also filed a proof, so now you have to pay both of them? Then I would definitely be on my lawyer's doorstep Monday morning.

However, if chase and sams club received notice of your bk, and then sold the debt to the 3rd parties and the 3rd parties filed the claim, I must let you know that happens all the time. If they bought the debt, then they probably have a valid claim.
In my own case, over half the creditors sold my debt to 3rd parties, who were then paid what the original creditor would have received. Several of my creditors- Walmart MC and AmEx sold the debt immediately and never filed their claims, but the 3rd party did. The original creditor received nothing from us, only the 3rd party. And one of my claims changed hands 3 times during my bk.

Please do run this by your lawyer and see what they say.

All my original creditors charged off my debt and sold it a year before I filed for Ch 13. Therefore, only a handful of the original creditors (AMEX, Capital One) posted a claim for any of these. Chase, Sam's Club, Meijer's and a finance company did not file a claim. My original debts for those were sold over and over. The LAST ones who bought those debts (B-Real, and all the others) did so AFTER I filed the Ch 13 (which is being commonly done these days as these companies buy lists of people filing for bankruptcy, but I did not know that then and neither did my lawyer). There is not much information on this out there, but recently someone successfully had these claims dismissed after filing a lawsuit against them for lacking proof of claim. Most lawyers and filers are not aware of what these bankruptcy debt buyers are doing. I know my laywer wasn't and still isn't. Only way I found out was because one large debt bought by them was for a forgiven debt that I knew they could not claim but they tried, and it was thrown out by the judge AFTER my Ch 13 was approved. I looked my file up on National Data Center and saw it right there on the list of creditors who were going to get money! My lawyer wouldn't do anything so I wrote them after calling the Trustee and submitted my 1099 form and tax return showing I had declared it and then the judge had that debt taken off. So, I have a problem paying all this money to the vultures.

[Mary Irene]

I understand what you are saying and here are some issues. You do not want to dismiss your Chapter 13, but actually convert it to a 7, that is much easier and does not bring up the issue of abusive filing for being a repeat filer. If you were to dismiss the 13 and refile as a 7( which I wouldn't) it wouldn't matter what claims were filed by them, since they are all dischargeable. The thing you want to make sure is that all of your secured/priority debts have been satisified before you convert(there are some funky rules about converting as well, especially regarding your Schedule I and J, you need to show why you can't afford the payments when you were able to before)please read my disclaimer

I make too much to convert to a Ch 7. Wouldn't pass the means test.

[rrockinggramma]

You are saying that because you are in a 100 repayment plan, you want to challenge their claim, thinking that if they can't prove the claim they filed, you won't owe them, is that what you are thinking?

If you refiled, then you have to apply to have the automatic stay reinstated after 30 days. Many trustee's are not extending this auto stay which means you could receive calls from those junk debt buyers.

In addition, by dismissing and refiling, you open up the door for them to file HIGHER claims by allowing them the opportunity to add in all the accumulated interest and fees from 2006 forward.

I think you are opening up a can of worms.

[DebtSlave]

I agree with RRockinggramma.
E-Cast settlement bought 2 accounts from my 2 major credit cards after I filed. I was notified in writing by my attorney. I had an option to object to that transfer (whatever that meant). I declined to do so and they were automatically listed amoung my creditors.

[kornellred]

If you listed all of your debts in your Chapter 13 originally, and the trustee is disbursing payments to the creditors who filed, then there is no other debt that you are responsible for.

Period. End of discussion.

What creditors and debt buyers do behind the scene is of no consequence to you. Once the BK discharge is in your possession, you do not owe anyone anything, outside of whatever debt you incurred outside of the Chapter 13 filing.

[HHM]

I see no reason why you would have to do any of this. I think you are over thinking the issue.

If these debts arose before you "filed" your chapter 13, they get discharged when your chapter 13 gets discharged, it is that simple. It doesn't matter who owns them, or when they were bought, etc.

Finsish your chapter 13, and get your discharge.

[woeisme]

What the OP is saying is that he/she thinks that because these debt buyers can't verify the debts, they won't be able to prove their claims when he/she refiles. Because they are paying 100% in the plan, eliminating any of these debts due to inability to prove their claims will reduce what the OP is paying back. But despite this one example of a case where they dismissed a debt buyers claim that the OP lists, I seriously doubt that the trustee is going to agree to dismiss all debt collectors claims, especially if the debtor already admitted to owing this debt (which the OP did on the original petition, said they owed Sam's club X dollars) so the debt buyer has the OP's own admission about the debt being legit, as long as the debt collector can prove they purchased the debt in the OP's name from Sam's club, etc. So in essence, by filing BK, you did the proof of claim for them when you claimed this debt as yours, all the debt management company has to do is prove that they own the debt sold to them by your creditor, a much lower burden of proof than probably was required in the court case you are citing.

[HHM]

1. Did these companies file proof of claims in your case...and if so, why didn't you challenge them from the beginning.

In any event, you won't be able to dismiss and refile and I doubt doing so is in your best interests anyway. Depending on your circumstances, you might be able to modify your plan or seek a hardship discharge. But you would be wasting time and money dismissing this case and refiling. There are consequences to dismissing that you have not considered when it comes to your secured and priority claims, i.e. they get to add back any interest, penalties and late fees that other wise would have accrued but for the chapter 13, etc.