Creditor bothering me 6 years after Ch7?

[bossfrog]

I had a Chapter 7 back in Spring 2004. One of my creditors was a non-federal, nonprofit student loan (managed by a local law office) which I declared under advice of my attorney. No creditors challenged me at the bankruptcy hearing and I believe the judge discharged it.

They are now calling me about the debt. I told them they should have received a NOB back in 2004. They said they did, but that they are exempt. They haven't called me, mailed me or otherwise tried to contact me until now. They want me to come in and discuss how to go forward from here. We don't make a lot of money. We have 2 kids, 3 and 6, one vehicle, we rent our house, and don't have any real savings, but we are able to pay our bills and are getting by okay.

Should I call my original bankruptcy attorney before talking to them?

[Charlie777]

You definitely need to speak to your attorney. The law may have changed after 2004 to make private student loans non-dischargeable, makiung your discharge adequate. Even if the law change occurred before you were discharged, if they were listed for discharge and didn't object it may still have been discharged. These are tricky legal issues.

[tcreegan]

Hi bossfrog,

You are on the right side of BAPCPA, the 2005 BK reform law. Before BAPCPA, private, non-federal backed student loans were dischargeable like any other loan. After BAPCPA the private loans joined the federal-backed loans in being non-dischargeable.

received a NOB back in 2004. They said they did, but that they are exempt. ...they are not.

They want me to come in and discuss how to go forward from here. ...I'll bet they do.

Should I call my original bankruptcy attorney before talking to them? ...if at all possible.

Personally I would send a letter nicely informing them that the loan was made pre-BAPCPA (before Oct 15, 2005) and therefore not subject to the non-dischargeable status of federally backed student loans. Remind them, politely, that as no objection was made to the debts discharge status, it was discharged in the BK and contacting you in an attempt to collect $$ to pay the debt is a violation of the BK discharge injunction.

Document everything in dealing w/ these guys, something doesn't pass the smell test....if they are in the student loan business, you would figure they know about the law change.

Probably a case of my brother Eds law: Never attribute to malice anything adequately explained by incompetence.

Send 'em that letter and see what happens...

Tom in Colo

[bossfrog]

tcreegan:

It's not quite what you're thinking. They're not a student loan business. This is a small town where everyone knows each other. The creditor is a local attorney whom I've known as an acquaintance for years, who manages a trust fund which offers interest-free student loans to graduates of my high school. Either way, he didn't have a representative at the 341 meeting and it was discharged.

I lost most of my bankruptcy documents when my basement flooded a few months ago. Currently, I'm requesting a fresh copy of my final discharge papers, which I intend to present to him prior to the court date, which is a "Citation to Discover Assets". Prior to the court filing, he called me and wanted me to come in to discuss how to proceed with the debt, to which I initially agreed but then backed out due to the fact that he's not there to represent my interests at all. So even though I know him to generally be a good, reputable guy, my gut just told me to look for advice elsewhere first.

Tried to get in touch with my attorney from 6 years ago yesterday, but he was in court most of the day. Am I on the right track here? If the judge from the bankruptcy discharged the debt, that's pretty much end of story, right?

[enuffznuff]

If he's an attorney, he darn well knows that pre 2005 student loans WERE dischargeable in BK, since he admits to getting the notice, he knew about the BK, he's just hoping YOU don't know that you were in under the wire on getting student loans discharged.

However nice you used to think he was, he's intentionally trying to screw you here, since this is not a big company where the left hand isn't talking to the right hand.

Don't speak to him again without talking to your attorney. Your attorney should still have your stuff in his record archives, too, they are supposed to keep them for 10 years.

[tcreegan]

Hi again bossfrog,

You are right on the right track, discharged, end of story. But the other guys train is derailed and heading for the cliff....

copy of my final discharge papers, which I intend to present to him prior to the court date, which is a "Citation to Discover Assets".

Take you to court over a discharged debt?! ...major violation of the BK discharge injunction. We are talking flagrant foul here

he called me and wanted me to come in to discuss how to proceed with the debt ...another major penalty! You're outta here!

Since he seems to be a good guy, communicate to him ASAP that the debt was discharged and any attempt to collect on it is expressly forbidden by BK law. Tell him where the case was filed and have him look it up. Tell him to get a legal 2nd opinion from a BK attorney.

In the meantime, collect all evidence of any contacts re the debt. Document everything. If push comes to shove, you have ammunition to go after him in BK court for the discharge injunction violation.

Sorry to hear about the flooded basement, what a mess...

Tom in Colo

[bossfrog]

One other thing was that he told me on the phone that they were exempt because they were a 501(c) entity. But again, it was discharged.

[justbroke]

One other thing was that he told me on the phone that they were exempt because they were a 501(c) entity. But again, it was discharged.

Exempt because they are 501(c)... how silly! I'm falling off my chair laughing at that one! if the Federal Government, and State and Local Governments, can violate the automatic stay and discharge injunction, a mere 501(c) can do so too.

I would definitely contact my attorney and see what to do. This would be an egregious and wilfull violation of the permanent discharge injunction.

[bossfrog]

Okay, just heard back from my original BK attorney. He had his secretary call me and tell me that we would have to do a "bankruptcy enforcement" and that it would require another $1000 retainer! I shouldn't be surprised. It's all about the money these days, isn't it? Anyway, his secretary did tell me that most of the time when you present them with evidence of the discharge, 9 times out of 10 they drop it right there.

[justbroke]

Okay, just heard back from my original BK attorney. He had his secretary call me and tell me that we would have to do a "bankruptcy enforcement" and that it would require another $1000 retainer! I shouldn't be surprised. It's all about the money these days, isn't it? Anyway, his secretary did tell me that most of the time when you present them with evidence of the discharge, 9 times out of 10 they drop it right there.

No attorney should charge "$1,000" as a retainer for bankruptcy enforcement. You should ask him to do it on contingency, and he would recoup his fee as damages. He'd also be able to get 33% of your damages as his fee.

Yes, it's true that 90% of the time, showing the discharge order is enough to get rid of the bottom feeders. If they persist, perhaps "shop around" for an attorney that will take it on retainer.

[bossfrog]

Okay, I just got a return email from my former attorney. I still think his new $1000 retainer to further represent me is a bit ridiculous but he pointed to a clause in my service agreement that he would continue to represent me up to 4 years after discharge. Oh well. Anyway, he said to write a letter politely asking him to discontinue attempts to collect the debt and to drop his court filing and to include a copy of my discharge with the letter. It should also stipulate that further questions should be referred to the TRUSTEE over my bankruptcy case. It should be sent by certified mail. Does this sound correct to anyone with similar experience? Thanks for all the help!

[justbroke]

That is very circular but also interesting. I haven't seen a bankruptcy representation agreement where the attorney, in the agreement, stipulates to representing the debtor for 4 years after discharge! Most of them disappear right after the discharge -- and the fee agreement (services agreement) states as much.

I guess he just wants it on record that you don't want him to pursue, but he's offering you advice to just send them a copy of the Discharge and a letter indicating that further attempts to collect the debt will be met with ??? That the attorneys says to tell the creditor to call the Trustee, is very interesting.

Very interesting, is about all I can say.

However, even in my stunned response, I'll say that writing the letter and sending it certified mail return receipt requested, is the standard process for an "initial" attempt to collect the debt. What happens after that, is usually met with litigation, not the Trustee.

[bossfrog]

Yeah, well, if he wants to press it, I'll meet him in court.

[dumpinmydebt]

Just send him the discharge notice, certified with a return receipt. Inform him of his wrong doings and your intent to pursue legal action against him in court if he continues to attempt to collect on this discharged debt.

No way would I pay $1000 for an attorney to take care of this. Plus, even if he did go to court, I would go pro se. The judge is going to laugh in his face. I would go to court just to see that. LMAO!