Creditor Matrix And Timing Issues

[kornellred]

There seems to be a lot of debt selling going on, especially when it comes to relatively small amounts (let's say $2k or less). One collection agency holds the debt for a while and then decides they are not going to waste their time trying to collect, and yet another collection agency relieves them of the burden.

If the last known holder of the debt is listed on the creditor matrix, and that creditor sells the debt prior to the debtor actually filing for bankruptcy, is that debt no longer eligible for discharge, since the newest creditor was not listed in the matrix and therefore was not notified of the filing?

This situation must occur more than just infrequently.

[tcreegan]

Hi kornellred,

Yup, the debt marketplace is thriving these days. I had debts bought and sold 5 times over, and sometimes they don't sell the debt but hire another collector to go after it.

What I did was put everyone I could find on the creditors matrix. On the schedules, I started w/ the original creditor and underneath put anyone I knew who had made a collection attempt. I referenced each collection agency w/ "collection on [original creditor] acct.

Its overkill, but has the advantage of never hearing from any of those clowns again. And I didn't need to call and find out who actually owned the debt.

BUT....the courts have ruled very consistently that forgetting, accidentally leaving off, debt got sold before filing, etc, an unsecured creditor, the debt is still discharged. Anything unsecured pre-petition gets discharged, part of that 'fresh start' idea.

Here is the kicker; in my case a collection company got the BK notice, then a week later sold the debt to another company! When company B called, I gave them the BK case # and file date, and was sympathetic they got [taken advantage of], but they acted like it was no big deal, business as usual.

I guess there is no honor among thieves or collection companies these days...

Tom in Colo

[free2breathe]

The original creditor of the debt is the most important. If you list the original debt, and any subsequent CA that that you know of, you're still covered for the debt. If, after you file, you received communication from a new CA for the old debt, you just get their address, send them a copy of the notice of bankruptcy, and you're good to go. If it's after your discharge and the same thing happens, you simply tell them that debt was discharged in your bankruptcy, send them a copy of your discharge papers, voila!

I think in this case, even if you are an asset case, the original debt being included with the original creditor on your matrix should protect you. Remember, it's the debt that gets discharged, so if that debt has been on a roller coaster ride, each hill along the way is still collecting on the same debt.

[sjades]

Agree with both posters above (we had followed Tom's model of including all and anyone who sent collection notices on the original debts...). we also rec'd a new CA while still waiting for discharge. i noticed that one of the digits of the account # was changed on the new CA's reference information for the original credit card, but regardless i'm sure it can be re-traced to the original debt. the new ca was notified of bk. so far no protests.

[AngelinaCatHub]

Hey, to add to this one, just a little off subject but what may happen to others: American General, a small loan 5K. We listed, told, and they got the matrix. Well on our 341, the TRUSTEE of all people handed us reaffirmation papers from them. He said, "here, I believe these are yours". I was dumbfounded and of course they were all filled out and not signed, and of course we never asked for them. A sneaky way of getting around the system? I think so. It didn't work as they knew my lawyer so trickery may have gotten some dumb Trustee, but I had a good one. Be careful. 'Hub