Received Letter from Law Firm / Debt Collector and filing BK soon

[jensantos16]

What should I do if I received a letter from a law firm trying to collect on an account that's 4 months past due. I am planning to file BK soon.

[frogger]

Need more info. Who is the law firm, who is the original creditor and EXACTLY what did the letter say?

[jensantos16]

Need more info. Who is the law firm, who is the original creditor and EXACTLY what did the letter say?

Bradby & Associates in behalf of Chase Bank. Letter says I need to pay or they will file suit.

[frogger]

Letter says I need to pay or they will file suit.

What exactly did the letter say?

[jensantos16]

Letter:

Our firm represents Chase Bank in the area of creditor rights. We have been assigned to collect the outstanding balance on the above referenced account. If we are unable to collect on our own, we will make the determination to pursue legal action to recover this debt.

We will assume that the above referenced debt is valid, unless you dispute its validity, or any portion thereof, within 30 days after receipt of this letter. If you notify us in writing within 30 days, this office will obtain the verification or a copy of a judgment and mail you a copy of such judgment and verification. If you request this office in writing within 30 days, we will also provide you the name and address of original creditor if different from the current creditor.

This communication is from a debt collector. This is an attempt to collect a debt. Any information obtained will be used for that purpose.

[frogger]

Letter:

we will make the determination to pursue legal action to recover this debt.

That's a good thing. There is "wiggle room" in the language, so you are probably not going to get sued immediately.

Wait about 20 days and then send off (certified) for them to verify the debt. That will buy you another 30 days or so.

Continue to make your plans for filing bk. You can probably drag this out at least 60-90 days without much effort.

Always remember..... in the collection game, words mean something. Letters are worded in specific ways for specific situations. Exact wording is very important.

Good luck!

[worrieddude]

I'm in a similar scenario. Similar letter - same bank different law firm and letter basically says the same. I feel so terrible receiving this kind of correspondence after years and years of paying my debts responsibly.

Does it matter if a collector gets a judgment against me, given that I am filing for BK anyway. Doesn't BK take care of payment arrangements I've made with collection agencies and judgments too?

[keepmine]

Does it matter if a collector gets a judgment against me, given that I am filing for BK anyway. Doesn't BK take care of payment arrangements I've made with collection agencies and judgments too?[/QUOTE]

BK will discharge any debts you've been paying via judgments or payment arrangements with a collector or creditor.

The letter the OP received was pretty boilerplate. It didn't say for a fact they would be sued. Just said a determination would be made.
Agree with Frogger. A long way from litigation.

[bcohen]

I'm in a similar scenario. Similar letter - same bank different law firm and letter basically says the same. I feel so terrible receiving this kind of correspondence after years and years of paying my debts responsibly.

Does it matter if a collector gets a judgment against me, given that I am filing for BK anyway. Doesn't BK take care of payment arrangements I've made with collection agencies and judgments too?

Actually, it does matter if you file first, or if the creditor(s) get judgement(s) first. Although it is true that bankruptcy will discharge the underlying debt (if it is a credit card or other dischargeable debt) however it will not automatically vacate any judgement that creditor(s) may have gotten. Therefore, the garnishment of your wages and/or bank accounts may continue until you file a separate motion to set aside each judgement, which will of course cost additional filing fees and attorney fees if you have an attorney do it. So the bottom line is that it is definitely cheaper and better to avoid getting judgements if at all possible.

[pavlikclan]

We have a judgement against us but we pay it of our own free will each month. I would assume this is different?

[LadyInTheRed]

Actually, it does matter if you file first, or if the creditor(s) get judgement(s) first. Although it is true that bankruptcy will discharge the underlying debt (if it is a credit card or other dischargeable debt) however it will not automatically vacate any judgement that creditor(s) may have gotten. Therefore, the garnishment of your wages and/or bank accounts may continue until you file a separate motion to set aside each judgement, which will of course cost additional filing fees and attorney fees if you have an attorney do it. So the bottom line is that it is definitely cheaper and better to avoid getting judgements if at all possible.

It's true that a motion needs to be filed in the court where the judgement was entered in order to set aside the judgment after the debt is discharged and that it is therefore simpler and cheaper to file BK before the judgement is entered. But, the garnishiment of wages and levy of bank accounts must stop as soon as the creditor receives notice of the debtor's bankruptcy filing.

[bcohen]

Alright, let me correct myself. The garnishment of wages and levy of bank accounts should be stayed up until the bankruptcy is discharged, but may then resume until/unless the debtor files a separate motion to have the judgement(s) set aside. This will of course add significant expense and hassles.

[keepmine]

Alright, let me correct myself. The garnishment of wages and levy of bank accounts should be stayed up until the bankruptcy is discharged, but may then resume until/unless the debtor files a separate motion to have the judgement(s) set aside. This will of course add significant expense and hassles.

This isn't correct either.
If the debt that created the judgment is discharged, the creditor can't start garnishing wages again. The automatic stay morphs into a permanent injunction prohibiting further collection activity.
The main reason you need to get judgments vacated is to get them off your credit report. Many lenders won't touch you with a judgment still on your credit report.

[frogger]

The main reason you need to get judgments vacated is to get them off your credit report. Many lenders won't touch you with a judgment still on your credit report.

Judgments on your credit report are killers for the lenders. If you have a judgment or fifa on your report, most lenders won't touch you.