Collection agency

[special111]

So I am meeting my lawyer early next week to file ch 7. I am wondering how long though it takes a credit company to sue for owed funds? I had a unsecured loan that has went to collections, I am told this can be included in bankruptcy. If included I assume this cannot be sold to another collection agency as I have heard of this happening as well. Any input is appreciated.

[justbroke]

Two quick notes. First, there is no way anyone could estimate the length of time between when you default on a debt and the creditor threatens to or actually does sue you. Some creditors are aggressive while others would just sell the debt after writing.

Second, nothing prevents a creditor from selling off debt. It is quite common, nearly 90% of the time from my personal estimates, that debt that is dischargeable in bankruptcy is still sold to "junk debt buyers" (JDBs). These JDBs pay for a "portfolio" of debt and it is certainly pennies on the dollar for bankruptcy debt. There is some hope that some of the cases will be assets cases since "some" Chapter 7s are asset cases and all Chapter 13s are (defacto) asset cases. In those cases the JDBs "might" recover some money through a Chapter 7, but certainly "may" recover something in a Chapter 13. Even when a Chapter 7 is filed, there may be a conversion to Chapter 13 and the JDBs may still recover something.

As to how much the JDBs pay for these portfolios of debt is anyone's guess. They buy "millions of dollars" worth of debt for tens of thousands. If they are lucky, they'll collect on enough of these to actually make millions of dollars a year.

Let me finish by saying that if your debt is discharged in bankruptcy or you are in an active bankruptcy (such as a Chapter 13), then these JDBs are not legally allowed to ask you to pay or otherwise take actions to "collect" the debt since that's covered by various bankruptcy law. It doesn't mean this sort of zombie debt won't resurface, but rest assured that the discharge of the debt should stop them in their tracks.