Creditor selling to collection agency post-discharge!

[sscott4775]

Hi everyone,

I have a quick question...what do you do when you have filed Chapter 7 bankruptcy, been discharged, and a creditor has been mailed a copy of that discharge, and at some point later...sells the debt to a collection agency? I think I might have had a pre-petition creditor try to pull a fast one on me.

Thanks!!

[newbie2]

As long as the collection agency doesn't try to collect it really shouldn't affect you. The original creditor was in the wrong, and the collection agency that purchased the debt should be able to go after them for a refund. (They buy those things in bulk though, so I don't know what their process is in purchasing a bk'd debt and uncollectablity) Just keep an eye on your credit report to make sure this new place doesn't put something on there.

[tobee43]

Hi everyone,

I have a quick question...what do you do when you have filed Chapter 7 bankruptcy, been discharged, and a creditor has been mailed a copy of that discharge, and at some point later...sells the debt to a collection agency? I think I might have had a pre-petition creditor try to pull a fast one on me.

Thanks!!

i would contact them (the collection agency)once with the docket nuber of your 7 and in the same sentence tell them if they attempt to contact you again, you will file a complaint with the FTC.

[df04527]

Buying and selling BK debt goes on all the time. I don't believe that is illegal, so to speak. The act of collecting is so as long as they dont contact you to try to collect the debt or report on your credit report I would just stand back and watch.

[tobee43]

Buying and selling BK debt goes on all the time. I don't believe that is illegal, so to speak. The act of collecting is so as long as they don't contact you to try to collect the debt or report on your credit report I would just stand back and watch.

i would think it does. because, if the original creditor is knowingly selling bad debts that were discharged in a bk (as indicated by the OP), i would think that is a big nasty naughty...LOL!

i remember a story about an elderly man who was getting collection calls and being threaten and it wasn't even his account. his old bank made an error by selling what wasn't even a debt...gave the collection agency this poor 84 year man's phone number, address, etc. they harassed him so much he had a heart attack.

also when we got this new number ...when we moved here to florida, whom ever had this number before owed everyone and their mother. i mean boa, chase, discover, citi, suntrust and so on and so forth, you name it mr and mrs A owed them. i would tell them it wasn't the right party!!! they didn't care and kept calling night and day insisting i was lying about who i was. finally, i took a call and as i was taking the call, i asked them to speak slowly and clearly so i could get all there information. a call back number etc. and, while doing so, i just pulled up the FTC site and wrote the complaint. when done typing it in, i would reiterate all the information back to the person on the phone, co. name, their name, phone etc. and then tell them thank you for the info, you have just been reported to the FTC for attempting to collect a debt that does not belong to us after repeatedly being told you have reached the wrong party. (now this is just an example, i understand OP is dealing with a debt that was sold after bk discharge, but i would handle it the same way).

after approx. a month or so, i think i got them all in to the FTC, hence...we didn't' get the calls anymore.

[sscott4775]

Thank you all, that is all very helpful advice. They called my cell the other day and it was a missed call, but I'm familiar with the company. I was thinking about waiting for a bit to see if they send one of their form letters asking payment or threatening "legal action." and if so, then getting in touch with them and the original creditor with my discharge.

I guess it just irks me that the creditor has the discharge...it's makes me wonder if they're not trying to ignore it? Oh well, they're treading at their own risk.

By the way, tobee, if it came to filing a complaint with the FTC, what would they end up doing to the creditor?

Thanks!!

[tobee43]

Thank you all, that is all very helpful advice. They called my cell the other day and it was a missed call, but I'm familiar with the company. I was thinking about waiting for a bit to see if they send one of their form letters asking payment or threatening "legal action." and if so, then getting in touch with them and the original creditor with my discharge.

I guess it just irks me that the creditor has the discharge...it's makes me wonder if they're not trying to ignore it? Oh well, they're treading at their own risk.

By the way, tobee, if it came to filing a complaint with the FTC, what would they end up doing to the creditor?

Thanks!!

you are most welcome.

many of these agencies are now getting fines, sometimes BIG fines, depending how many complaints come in on them. that is why i think it's so important to file the complaints, just to put a stop to this type of behavior. in some cases you may even get damages depending on the situation, since really after you rec'd your discharge it is very clear anyone listed on that petition, which is applicable as an unsecured debt, (there are some exceptions), is no longer allowed by law to contact you in attempt to collect the debt.

once the agency is notified by the FTC, they usually back off since they don't want the fines, nor the complaints to continue.

here's the site just in case you need it at your fingertips.. http://www.ftc.gov/

also here's the FTC consumers guide...hope it helps a bit! http://www.ftc.gov/bcp/edu/pubs/cons...dit/cre18.shtm
best of luck!!!

[keepmine]

It's not illegal at all to sell debts IIB. A few collection agencies do it for whatever reason.
As long as they don't attempt to collect they've done nothing wrong.

http://www.businessweek.com/bwdaily/dnflash/content/oct2007/db20071031_039775.htm?chan=search

"Happens All the Time, Your Honor"
Because of episodes like this, discharged debts have attracted the attention of little-known firms expert at buying and selling a range of delinquent consumer obligations. Back-due bills with a face value of billions of dollars change hands at a steep discount every year. Five of the companies in this business are publicly traded on Nasdaq. Others have large private-money backers. B-Line, in Seattle, was acquired last year by the Dallas-based hedge fund firm Lone Star Funds. The investment bank Bear Stearns (BSC) owns two bankruptcy-debt buyers: Max Recovery and eCast Settlement.

The very existence of this marketplace confounds even some veterans in the bankruptcy field. During a preliminary hearing in New York in March, U.S. Bankruptcy Judge Robert Drain asked a lawyer for JPMorgan Chase (JPM) how the bank had managed to sell consumer credit-card debts that had been discharged. "I don't know who would buy a discharged account," the perplexed judge said.

"Happens all the time, your honor," the Chase lawyer, Thomas E. Stagg, responded.

[frogger]

Selling and buying discharged debts happens all the time. It's not illegal to sell them, however it is illegal for the purchaser to attempt to collect them.

Many times, these bk debts are part of a debt portfolio in which the purchaser really doesn't know what they are buying, or they have info as to how much is charged off, bk, over 1 year old, etc.

As long as no one tries to collect, then no problem.

If someone does try to collect, you should give them one opportunity to have your bk case # with discharge. Any further attempt after that should be subject to your legal council.

[tobee43]

it may not be illegal to sell the debts, i agree, but to attempt to collect them, it is, if they were discharged, i believe that is an issue.

i also agree that if i were contacted and provided the bk info as frogger and keepmine states above, and they stop attempting to collect, that would be fine. however, i'm saying or pointing out, if the contacts continue..i.e. cell phone calls, letters etc., (as OP stated), then i would file a complaint about the situation.

on a personal note. HATE THOSE COLLECTORS!!!!