Bankruptcy is supposed to make all the stress go away. We’ve talked over and over again about how wonderful bankruptcy is and how it melts stress like butter. When you file and get your discharge, you’re supposed to be in the clear. What happens though, when you’re in the clear and then out of nowhere, someone comes knocking wanting to collect on an old debts?
Getting a collection notice on a debt that was supposed to be discharged is a stressful situation. Sometimes people make mistakes or attorneys get lost in the shuffle but more often than not, that debt collector is just in the wrong.
Chances are, the debt collector bought your debts without having any idea that you’d filed bankruptcy. This is what we call, distressed debt. Distressed debt is when companies who can’t collect on debts often sell them, in packages, to debt buyers. Debt buyers pay 5-10 cents on the dollar for debts and usually just get a list of debts. If they collect on 10% of the debts, they usually make a good return on their money.
If you get a phone call or letter from some crummy debt collector, fight it.
The first thing you should do is find out who they bought the original debt from That will usually be listed on the collection letter. The next step involves getting your bankruptcy paperwork. First and foremost, find your discharge paperwork. Once you have that in hand, send the creditor a copy. Usually just saying you filed bankruptcy will scare off most people like this
You’ll want to get proof that you sent them this information so send it USPS certified. Keep a copy of the letter you sent them and your bankruptcy papers. Again, remember, they usually have no idea you filed bankruptcy so this will usually make everything go away.
But they won’t stop
You called their bluff and sent them the paperwork you needed to send. They should have gone away. After All, it’s the law, but some of these guys are insufferable and just won’t listen. That’s when you call in the big guns.
First, call us. We’re always happy to help and we love to smack these guys down. They’re disregarding our hard work and the discharge order from the judge. Most judges don’t take kindly to people ignoring their orders. We’ll call them and remind them that you were discharged. That’s their last warning.
Our next step is to file a motion for sanctions against the collector that’s violating your discharge order. We’ll help you do this. We will file the order in the court that your original case was filed in and then we’ll go to work. We’ll submit evidence to the judge and once we do that you’re entitled to damages, including any fees you have to pay us for taking this on.
Establishing the case for damages
If this happens, it’s best to take meticulous notes about the outfit that keeps calling you. Keep track of all the money you’ve had to spend to fix this problem. The better record you keep, the easier it is to prove your damages if it goes that far.
You need to keep an eye on your credit report and make sure that the discharged debt hasn’t been placed on there again. If they have, they’ve opened themselves up to additional damages.
Long story short, we love what we do and we love helping people. We’re always here for you to help you with your bankruptcy related issues. If you have an issue, give us a call and let’s see how we can figure this out together.