Are Creditors Trying To Collect After You’ve Filed Personal Bankruptcy?
Personal Bankruptcy Debt Questions
When you file personal bankruptcy, you are not required to pay any debts that have been discharged at the end of the bankruptcy process. However, this ruling does not always stop creditors from trying to collect these debts. They often play on the uncertainties of debtors who may not be entirely sure which debts were discharged during bankruptcy and which were not.
Ways Creditors Try To Collect Your Money After You File Personal Bankruptcy
There are several ways your creditors may attempt to collect money you don’t owe. If you have completed the personal bankruptcy process, it is important to not give in to these forms of communication until you find out if you actually still owe on the debts.
- Letters Through The Mail- If you receive a letter through the mail from your creditors, informing you payment is due, do not pay them. Instead, save the letters and the envelopes to show your attorney.
- Phone Calls- Keep a pen and a pad of paper next to your phone. Each time the creditors attempt to call, write down the name of the creditor, the date, and the time of the call. A few notes about what was said during the conversation may be helpful as well.
- Lawsuits After Personal Bankruptcy Discharge- If you receive letters threatening lawsuits from your creditors, make sure to save them to show your bankruptcy lawyer. If the case does go to court, the judge will see you did file personal bankruptcy and will most likely laugh the creditors out of the courtroom. The creditors will also have to face the legal ramifications of trying to obtain payment from you after you file personal bankruptcy.
- Threatening to Keep Discharged Debt on Your Credit Report- Unscrupulous creditors often attempt to threaten you in order to receive payment for discharged debt. They may threaten to fail to update your credit report if you don’t pay. This is against the law. Keep an eye on your credit report after you file personal bankruptcy and make sure all of your information is updated.
Personal Bankruptcy and Creditors Attempting to Collect Illegally
Basically, creditors who work collections receive bonuses, payment and commission based directly on the amount of money they are able to collect from you. Here is an example of how your creditors may make money off of your discharged debt.
Let’s say you owed your creditors $5,000. After filing personal bankruptcy, your debt was discharged and you then owed the creditors zero dollars. A third party debt collector came along after your bankruptcy was finalized, and offered to purchase your debt for $10. Since the original creditor wasn’t going to make any money off of your debt, they gladly accepted the $10. The third party debt collector would then attempt to contact you and attempt collection. If they were able to convince you to pay any amount over $10, they would make a profit.
Unfortunately, this is quite a profitable business. Many of these creditors are able to convince debtors to pay off some of their discharged debt, either through threats, guilt, or consistency.
You don’t have to fall into this trap, though, after you file personal bankruptcy. Report any contact from creditors to your bankruptcy lawyer. He will be able to put a stop to it immediately.
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