Blogs by William Manchee
What All Bankruptcy Filers Should Know - Part 2
2/25/2009 7:52:27 PM
With millions of people forced to file bankruptcy in this desperate economy, I wanted to share some important information that is often overlooked by bankruptcy filers and their attorneys.
We all know that when a debt is discharged in bankruptcy thatís the end of it, right? Think again. Creditors have a sack full of tricks to get consumers to pay debts that they donít have any legal obligation to pay. In fact, there is an entire industry of debt buyers out there that most people donít even know about. Iím not talking about the collection agencies, but companies and trusts that do nothing but buy and sell debtósome of it discharged. Obviously if the are buying the debt they intend to collect it. Below are a few of the ways itís done.
1) Closing on a house or car. When your bankruptcy is over you will eventually need to finance a new car or buy a home. When you go to apply for a loan your loan officer will pull your credit and may tell you that you donít qualifyóunless you can pull up your credit score a few points. They suggest you contact some of your creditors that are negatively reporting on your credit report and settle the debt. You protest that the debt has been discharged but they just shrug. So, you take their advice, contact the creditors and pay off some of your discharged debt. What you werenít told was the negative reporting shouldnít have been on your credit report in the first place.
2) Several months after you bankruptcy discharge comes through you start receiving telephone calls or letters from a company you donít recognize. You think perhaps you didnít list them on your bankruptcy and are still liable for the debt or the collector says this debt isnít discharged by the bankruptcy. It gets ugly from there on and you end up settling with them. What they donít tell you is that they bought the debt from a creditor who was listed in the bankruptcy or that, in a no asset case which is the norm, an unlisted debt is still usually discharged.
3) After your bankruptcy is over you continue to pay an auto loan or home mortgage, although you donít formally reaffirm that debt. Later on you get behind on the payments and the car is repossessed or the house foreclosed. Months later a collection agency comes along and tries to collect the deficiency. They tell you or you assume that you still owe the debt since you continued to pay on it after the bankruptcy is over. What they donít tell you is that the debt is still discharged and usually not collectible. The creditors sole remedy, in most cases, is to take back their collateral and thatís it.
4) After your bankruptcy is filed some of your creditors will quit updating your credit report so they donít have to report that their debt has been discharged. They hope you will voluntarily pay them later to improve your credit score. What you should know is that this trick called ďparking an accountĒ and you can dispute the account and make them update it without paying them a nickel.
For more information go to http://protectyourfreshstart.com
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