Question about transferring claims

[Nicollette]

I received in the mail today from the BK court a "notice of filing transferred or assigned proof(s) of claim." It states that National Capital Management, LLC filed a transfer/assignment for a transfer of claim originally filed by Roundup Funding, LLC. So basically Roundup Funding is transferring the claim to National Capital Management. This is the second time a creditor in my plan has transferred a claim. My question is, why do they do this?

[justbroke]

There is actually money in the claims trafficking business -- as the Court likes to call it. That's where they speculate and keep trading down the claim to other junk debt scavengers. These guys are worse than junk debt buyers.

These guys actually buy debt that is almost noncollectable (due to potential Bankruptcy discharge).

However, they bet on you either not getting a discharge (dismissal), or that your Chapter 13 Plan will pay them something.

[Nicollette]

There is actually money in the claims trafficking business -- as the Court likes to call it. That's where they speculate and keep trading down the claim to other junk debt scavengers. These guys are worse than junk debt buyers.

These guys actually buy debt that is almost noncollectable (due to potential Bankruptcy discharge).

However, they bet on you either not getting a discharge (dismissal), or that your Chapter 13 Plan will pay them something.

I asked my BK attorney about this and he says there's nothing for me to worry about. Well, does this give the new owner of the claim the right to report to the credit bureaus, or will my credit reports just list the previous owner of the claim?

[justbroke]

I asked my BK attorney about this and he says there's nothing for me to worry about. Well, does this give the new owner of the claim the right to report to the credit bureaus, or will my credit reports just list the previous owner of the claim?

They are, technically, nothing to worry about... unless your case gets dismissed.

They can not report to the credit bureau as that is considered -- and there is caselaw to support that it is -- an attempt to collect a debt. If they bought the debt prior to filing, they can report it. If they bought it post petition, they can't report it. That doesn't mean that some won't try, but it's a technical violation of the automatic stay.