Help on advice after discharged 7, creditors coming back?

[optimuslives]

Ok, here is the situation. Gone thru the divorce from hell, filed bankruptcy in Nebraska in December of last year, was discharged beginning of April this year, and now, after almost a year and a half of not paying a former apartment community, they are coming after me for the debt (which I forgot to list since my ex stole all the documents when she moved out).

I have read conflicting things online. Some say all I need to do, since it was a discharged, no-asset chapter 7, is mail them a copy of the discharge notice, and it's over and done with, because it would've been discharged anyways in this case. Others say I need to amend my schedules and include them now. I got this letter tonight and was planning on calling my bk lawyer tomorrow to see what he said, but was also curious if anyone knew here, so I could save myself some time and money and get this over and done with. What do you guys (and gals) think? What is my best bet? Or should I threaten to amend the schedule and just try and negotiate the debt down at this point since it's been so long?

[Lordnite]

Your lawyer might be the best source but since the debt was not listed on your BK it should techinically not be discharged since they were not listed as a creditor.

I don't know why people would recommend that you mail a copy of the discharge because if they are not listed in it then it does not apply to them. Debts must be listed or they do not go into the BK.

As for amending it, I can't say for Nebraska but I don't think you can amend the creditor listing for a bankruptcy after a discharge since the creditor would not be able to get a chance to file any disputes with the court about the debt.

[whipster1]

Start with your discharge, because there is case law saying that every unsecured creditor is discharged due to no assets available even if not listed.

You will get more responses here just wait a bit and the first guy that responded is not informed.

[Lordnite]

whipster is correct, but everywhere I have read it also says it is depending on the district in where the BK was filed, not every court abides by that standard apparently. I cannot find anything referencing what Nebraska has to say on the matter, which is why I would still check with the lawyer to get the final say so.

Sorry to have offended you whipster, it was nothing more then friendly advice from my own experince and reading.

[justbroke]

Everyone is saying things that are accurate, but they must be put into context. Here's a more definitive post on how this works, and some sections of the law so that you can check what I'm writing.

In some Districts, the courts have found that "re-opening" a case just to include a creditor that you left off the schedules, in a no asset case, is not necessary. The reasoning is that 11 USC 727 read specifically that "a discharge under subsection (a) of this section discharges the debtor from all debts that arose before the date of the order for relief under this chapter". The Courts chose not to parse the word "all" and says that is instructive.

The only time "all" debts are not discharged is in an asset case where the creditor should have been offered the chance to timely file a claim and be part of any distribution of liquidated assets.

As to mailing the discharge, probably 99% of creditors will back off and mark the amount as uncollectable due to being included in bankruptcy (IIB). No creditor wants to actually be found in contempt for violating the Permanent Discharge Injunction. (It's like violating the automatic stay.) This is why it's suggested that the discharge order be mailed to creditors.

In case a creditor does state that they were not informed of the Bankruptcy (it's hard to believe in this electronic age of "automatic" notifications to the CRAs that no collector/creditor is not), Debtors will sometimes re-open their Chapter 7 case in order to add the creditor. The Debtor is in fact allowed to do this is a no-asset case. However, and see above, many courts have found that this serves no purpose and re-state that a discharge on a no-asset cases discharges the debtor from all debts that were created before the commencement of the case.

Now, if your case is not yet closed, and you want piece of mind, ask your attorney how much to amend the schedules before closing. The court cost is $26, but most attorneys charge at least $100 for this service. Just make a logical choice... like don't pay $226 to amend the schedule to discharge a $10 debt! In all cases, I'm talking about no-asset cases. An asset case complicates things significantly.

I hope that helps everyone.

Sources:

• http://www.justice.gov/ust/eo/public.../abi012001.htm
• The 6th circuit says that reopening a closed no-asset case to add a creditor has no effect on whether the omitted debt is discharged. See Beezley v. California Land Title Co. (In re Beezley), 994 F.2d 1433, 1434 (9th Cir. 1993) (per curiam)
• Since this was a no-asset, no-bar-date case, "all garden variety debts are already discharged" See In Re; Guseek, ED of Wisconsin, 01-30272-svk
• In Re Lawrence WOLFE 78 F.3d 110 (3rd Circuit) finding that...

  We hold that in a no-asset, no-bar date case, dischargeability is unaffected by scheduling. After a case is closed, the debt in question was either discharged or excepted from discharge based on sections 523 and 727(b). Therefore, the filing of a motion to reopen is not necessary to discharge the debt if the statutory exceptions to discharge do not apply.

[optimuslives]

cool, thanks for the advice. I'll be giving him a call in the morning. It was closed in May, that's what worries me, but I just found the timing odd that they are contacting me now....didn't make any sense to me

[aces67]

Read your discharge really well. On the second page of ours it states that all dischargeable debts that were incurred BEFORE the filing date are now discharged.

Hopefully you can just send them a copy of your discharge and be done with it.

[optimuslives]

Woo hoo! Called the apartment complex and cited the law that justbroke stated and used the argument that whipster1 and aces said. They stopped immediately. They said I can send a copy of the discharge in, it was my ex-wife's attorney telling them to come after me. Go figure. Thanks everyone!

[justbroke]

Congratulations. It's always good when we, the Debtors, are empowered to stop these creditors (and debt collectors) in their tracts!

[aces67]

Congrats! I'm glad you got it taken care of without a lot of hassle.

[AngelinaCat]

Here is my little tidbit to add:

We are an asset case. During the course of our BK our telephone service, with which we had unlimited long distance, changed ownership. The new owners did away with the unlimited long distance, and started charging.

Because our BK was active, we were never notified because of the Automatic Stay. Once we were discharged, we started getting 'nastygrams' from the company, and a CA to which the account had been sold. The amount they were trying to collect was around $520.00. We sent copies of the Discharge Order to both entities, certified with return receipts.

The one to the collection agency was returned as 'addressee not found'. A google search found that that CA had gone out of business. Several months later we got another nastygram from a different CA. We likewise sent a copy of the Discharge Order along with a statement of the particular law that they were violating by contacting us.

So far, no green card has come back nor the letter returned. That was more than nine months ago....