Dealing with Debt Collectors After Your Bankruptcy was Dismissed
Dear Michael, I have not paid my cc since 12/2012. Unfortunately I hired a crook of an attorney who said he could file a chapter 11 to save my house and refinance from $240,000 to $114,000. I did not realize it but he was not able to file a chapter 11 and he filed a chapter 13 without telling me. He charged me $17,000.
I went to court to disgorge his fees. I lost but the Judge dismissed the bankruptcy in March 2013.
I owed about $48,000 in credit card debt.
So far I was contacted by Capitol Appreciation saying I owed a Discover card debt of $5,000. I sent a debt validation letter and they did not answer.
I just received a letter from Portfolio Recovery Associates who bought the debt from Pier One. Should I send a debt validation?
My question is how likely will all the creditors come after me after the fact the bankruptcy chapter 13 was filed May 2012 and dismissed March 2013. December of 2016 will be 4 years the statue of limitations for the credit collection to take me to court. The bankruptcy was filed in May 2012, but no payments were made no plan was filed. The Judge dismissed the bankruptcy March 2013 and did order the attorney pay me back $3,000 only.
So my question is would it be wise to send validation letters to any collection companies and see what happens?
Could your counselors help me figure out a plan. No payments were made to the credit card companies since 2012, so... will 2016 be the four year statue of limitations? Thank you so much for any advice on this situation .
Is the statue of limitation up in 2016 since no payments were made, and even though my bankruptcy was filed then dismissed?
—Meta
Your chapter 13 bankruptcy filing will often create a stay on collection activity. It can take time from the date you file, to the date a workable repayment plan can be established and started. Even though your plan never got underway, that gap of time between filing and your chapter 13 being dismissed, can put a pause on the SOL time for your credit card bills. This stay on collections and the SOL is often referred to as tolling.
Your accounts may have tolled for 10 months. That would mean adding roughly a year to the SOL for a debt collector to legitimately sue you. You can run this by an experienced bankruptcy or debt defense attorney and double check.
Bankruptcy Dismissed, but Debt Collectors Come Knocking
I have seen chapter 13 dismissals that seemed to have created a void for credit card debts to fall into. People may never hear from their creditors or debt collectors again. The last file I worked like this was about a year ago and involved more than a dozen credit cards between the husband and wife. Their bankruptcy dismissal had been 2 years prior, and not a peep was heard about all but one account.
I also see bankruptcy dismissals that show debt collectors are paying attention. And that appears to be the case with you, as evidenced by the two debt collectors you have heard from on the Discover and Pier One accounts.
Portfolio Recovery Associates (PRA or PRG) is highly litigious with the debts they buy. You could send a debt validation request if you like. The threshold of information they need to respond with is so low it can be tripped over. If there is any difficulty with them getting the media they need, they may not bother pursuing the debt. But they may also take a close look at how collectable you seem, and become more likely to sue.
Discover does not sell debts currently. And Discover can also be aggressive with collections in the courts. The debt collector you wrote that validation letter to may end up responding to you once they get anything needed from Discover, or Discover may yank the account and place it with an attorney in your state in order to collect, including through the courts, if necessary.
Was your debt validation request letter a long one, where you ask for a whole bunch of things, or short and to the point?
Then again… they both may just not pursue your accounts that hard. Not all collection accounts are targeted for aggressive collections. Not by a long shot. You can put up a good defense if Portfolio Recovery does sue. Discover would be another matter. You can negotiate settlements if either or both go that route, or you could be more proactive and try to settle with them now. I often find settlements prior to attorney placement to offer a better savings.
There is help available. But before we go there, I have a few questions.
What state are you in? What are your goals for resolving these accounts? Are there other unsecured debts besides the two we are talking about?
Post your answers in the comment section below and lets go from there.
Anyone reading who has questions or concerns about dealing with debt collectors after your bankruptcy was dismissed is welcome to post below for feedback.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
Good morning, I have been in chapter 13 for almost one year and will be getting a large bonus from my employer. The bonus would cover all my credit card debt, except a collection account over 8 years old. I am considering having my case dismissed, pay off the credit card debt, and move forward. Can I negotiate with creditors on a settlement, or pay-off balance prior to having my case dismissed? If not, can I get an attorney to assist? My bankruptcy attorney is not responsive since I have paid their fees.
It is not something to start until right after the chapter 13 dismissal.
I can help you with this.
Go ahead and schedule a phone call with me here: https://calendly.com/debtbytes/15min
I can talk through strategy with you on that call.
Hi there, after being shut down for covid, the hubby losing his job, we just got dismised Sept 15. USAA already is contacting my hubby. We were able to catch our mortgage back up and paid off our car. Now we are considering trying to sell our house and downsize. Can the credit card creditors come after our house or the proceeds from the sale?
They would have to sue first, get a court judgment, and then try to lien the home, or levy your bank account.
You can prevent that well in advance.
USAA settles for half or less, and gives time to pay the settlement.
Whether you proactively do that now, or when you are in a better financial position, you have options.
Thinking about voluntarily dismissing my CH13. Wondering how likely these debtors are to try & collect:
13.7 LLC-CheckSmart
Amazon – QUANTUM3 GROUP LLC
Best Buy – PORTFOLIO RECOVERY ASSOC
Best Buy Credit Services
Capital 1 Bank -MIDLAND FUNDING LLC
Capital One-Helzberg-PORTFOLIO RECOVERY
Capital One-MIDLAND FUNDING LLC
Care Credit – QUANTUM3 GROUP LLC
Care Credit – QUANTUM3 GROUP LLC
Credit Acceptance Corporation
Credit One – LVNV FUNDING LLC
Fingerhut – QUANTUM3 GROUP LLC
JCP – QUANTUM3 GROUP LLC
Kay Jewelers
Lowes – QUANTUM3 GROUP LLC
Morris Furn – QUANTUM3 GROUP LLC
NBT BANK NA
WPCU-auto deficiency
NISSAN MTR ACCEPT CORP-auto deficiency
Virtually all of them will still try to collect, and some will sue.
Many will settle with decent payment terms, so that can mitigate many potential problems.
How long have you been in the 13?
What is the amount you pay to the trustee monthly?
I’m 2 years in. I pay $2500/mo and of that $250 goes to the trustee for fees.
Go ahead and schedule a consult with me here: https://calendly.com/debtbytes/15min
In the text box on the calendar be sure to list those debts with the balances owed.
I can walk you through the strategy I would use if it were me in this situation.
Curious to see if more debt collectors pursued in this case.
I too have dismissed my chapter 13 case after being in it for 3 years. Was wondering how long it’ll be before they start trying to collect again.
It varies by creditor. Some seem to just stay asleep on collection until the debt rolls off your credit. Others get super aggressive within a couple months the bankruptcy dismissal notice the court mails to them.
You are welcome to post the creditors and balances in this thread and I can sort them by the priority I see them in.