What is the purpose of buying bankrupted debt?

[sealpup]

What is the purpose of buying bankrupted debt? I saw on pacer today that one of our credit card accounts has been transfered to Atlas Acquisitions LLC, a company who buys bankrupted debt. We are a no asset case and expect to be discharged in a month. If this debt is discharged, I just don't understand why a company would want to buy it. From doing a little research on here and there website I don't think I have anything to worry about (except watching what the report on my credit report), but was just wondering how the benefit from this.

[malf1204]

The original creditor may not have told them that it was in bankruptcy. Or they buy and sell so many accounts that your account was just lumped in by mistake.

[df04527]

You would be surprised at how successul they are at collecting. They use all kinds of ways to get a consumers attention and the main way they do that is reporting on your report. Most BK consumers do not understand this is illegal and they can turn around and sue the creditor. Time passes and these vultures hope the consumer will just get annoyed enough to just pay it so they go away.

My advice is to review your reports frequently and if they report send them a nasty letter. If they continue to report you have grounds to approach the problem legally. Keep careful notes and send all letters return receipt requested.

[justbroke]

There was a great case out of the 11th Circuit where a creditor, with full knowledge that the debt was discharged in a bankruptcy, sold the account. The JDB (junk debt buyer) started hounding the debtor. The debtor wanted nothing of this hounding and filed a complaint with the Bankruptcy Court.

The debtor won! Guess who the debtor won his case against? (Against the JDB... is not the answer.)

[sealpup]

The original creditor?

So if they continue to report it on the credit report, send them a letter, and if it continues- do I then contact my bk laywer? What do you look for on your credit report anyway to see that they are reporting it was included in bk?
I can't believe they can get away with this, and there are debtors who would just rather pay them then pursue their legal rights (not for monetary gain, but just to be left alone since they were legally discharged!).

[justbroke]

Absolutely. (Yes, it was the original creditor.) They are not allowed to continue to report the debt to credit reporting agencies with a few caveats. It must be listed IIB and the balance must read $0. They can report your "prior" payment history, prior to you filing. Most creditors will just stop reporting, after zeroing the balance and marking it as IIB.

They get away with it because very few "complain" enough to re-open their bankruptcy case and pursue sanctions.