Can creditors charge off debt before discharge?

[Gracious]

My attorney filed by CH 7 BK 01-22-2010. The thought crossed my mind, DAAHH, What is to stop the creditors from charging off the credit card debt before my 341 hearing and thereby bypassing the BK process. They can then sell those accounts to a collector and get something and write off the charge offs on their taxes? Does my attorney or the BK courts notify the creditors of my impending BK with a return receipt requested? Sorry, but I am not clear on the paper trail in accordance with the law. I received a letter from one of the creditors offering me a deal to pay one half of the 18K as full payment. I can't even pay that much if I wanted to. Regards to all!

[flyinbroke]

I think it goes by filing date, not 341. I have not filed yet so someone who knows more can say so...but I am fairly sure it is the filing date that starts the BK timer and this means you are worrying over nothing.

[BobMango]

Gracious, the filing date is the key. The answer to your question is that your creditors can charge off any debt prior to your filing. Once discharged the debt will show as Included in Bankruptcy on your credit report, but the charge off will likely show as well.

As far as them selling the debt, it doesn't matter to you. If you list it in your filing, (and assuming it is dis-chargeable) it will be included in your case and you will no longer be responsible for repaying it, regardless of who bought it.

[BKDefender]

To be honest, it doesn't matter whether the creditor actually receives the notice or not, except for contempt motions if they take an action in violation of your bankruptcy stay. As long as the mailing address that the BNC (bankruptcy notification center) mails the notice to is the correct address (either their preferred one registered with the BNC, or the one on the billing statement if they haven't registered one), then the bankruptcy court presumes that the creditor received the notice.

They can discharge the debt and sell it to someone all they want, but if they or the subsequent purchases contact you to try to collect, it is a violation of the bankruptcy stay and can/should be treated by your bankruptcy attorney as such.

If you are contacted by ANY creditors, or anyone for that matter, trying to collect money you owed them before you filed bankruptcy, you should notify your attorney and provide him the information that the collector gave you.

--William

[tricia464]

Which Name to List Creditor Under

When filling out my paperwork, do I list the credit card company, or the collection agency or lawyer that they have handling the debt?

[BKDefender]

You should list the credit card company as the one you owe the debt to. You should then list the collection agency and the lawyer they have handling the debt as well - I don't list them in Schedule F but I do include them in the mailing matrix so they'll get a notice. Some people list collections companies & attorneys in Schedule F as $0.00 'For Notice Purposes Only' but they're not really a creditor so I don't.

--William