Creditor has already discharged my debt

[originalhealer]

Get this:

I just filed July 20. I haven't even had my 341 meeting yet. I just looked at my credit file, and to my surprise, one of my creditors that I included in my bankruptcy has already discharged my debt! It reads: "Included in Bankruptcy. Discharged." With zeros for the balance!

Now that's what I call fast service!

I guess they figured they didn't have a chance, so they may as well save everyone the time!

[Whittio]

Does that really happen? Was it a high or low balance loan? My mom has one card with less then $4000, I wonder if they'll do anything like that with hers?! Guess it still won't get you or her out of the 341 meeting, but hey, it's a start!! That's pretty cool!

[originalhealer]

It was under a thousand dollars, but still, I didn't expect that this soon!

[Whittio]

But still! That's pretty cool they aren't even disputing it! Good sign if you ask me! (of course, I really don't know anything.. LOL, but it SOUNDS good)

[HHM]

Yeah, that happens quite common, Many of the bigger companies, when they get notice of a BK, will update the credit report on their next update cycle.

[InDebtInMD]

Happened to us as well. OUr biggest CC was an MBNA card that had a balance of around 40-large. That was one of the first ones to say 'discharged in BK' and list a zero balance back before our 341. At that point I sort of figured the creditors really weren't likely to object to our discharge (although they still have until Monday).

[tdooders]

InDebtInMD I thought we were the only ones who had a huge MBNA loan. We also had one for over $40,000 with them. They were one of the companies that would not work with us whatsoever when we starting having problems with our finances. They wouldnt lower the interest or anything. When I told them we might be filing BK they said do what you have to we dont really care. But on our report also they were one of the first to put at $0 balance and report discharged in BK.

[InDebtInMD]

Yes, the MBNA card was the first one that we went late on, when they called I talked to them to see if we could get into some sort of repayment program (I was naive) - they said they could not help us.

[Whittio]

Wait a second.. both of you guys had a card with over $40k on it, and the bank discharged it without even having your 341 meeting?? Dang, makes me want to sign up for a MBNA card. ;)

My mom has 1 card with about $18k on it, and a small one with less then $4k on it, that's it. I could only hope both banks would discharge prior to 341 meeting, but that's really wishful thinking. Even if they do, she still has to go to the 341 meeting right?

[HHM]

Wait a second.. both of you guys had a card with over $40k on it, and the bank discharged it without even having your 341 meeting?? Dang, makes me want to sign up for a MBNA card. ;)

My mom has 1 card with about $18k on it, and a small one with less then $4k on it, that's it. I could only hope both banks would discharge prior to 341 meeting, but that's really wishful thinking. Even if they do, she still has to go to the 341 meeting right?

Its rare for credit cards to get involved in a Chapter 7. Its not so much the amount of debt on the card as it is, when the debt was incured. You could owe Capital One $100,000, but if the all the debt was incurred over a year ago, they won't even take a second look once they receive you BK notice. About the only time credit cards get involved is if you have made substantial use of the card (i.e. over $1000) in the 6 months prior to you filing BK.

[Whittio]

So, for my mom, the one card with $4000 on it, she hasn't used that card for anything in years except a car rental for $62 to get to my grandma's funeral last week. So do you think a card like that would just "sign off" on it?

Her other card, she pays them $425 a month, and then uses the card for about $300 a month to live on. Has been doing this for years now. No "new" usage, and certainly nothing large or extravagant.

Do you think there's a chance they might both sign off? If so, would she still have to go to the meeting?

[Confusdnfl]

Your mother absolutely has to go to the 341 meeting. If she doesn't her whole case will be thrown out, you will have done all that paperwork for nothing, and she will still owe all her credit card bills. The only person who didn't show up at the 341 meeting that I had was a disabled person. Her 341 meeting was done over a speaker phone at her attorney's office. She was sworn in there and we all heard her answering her questions.

[HHM]

So, for my mom, the one card with $4000 on it, she hasn't used that card for anything in years except a car rental for $62 to get to my grandma's funeral last week. So do you think a card like that would just "sign off" on it?

Her other card, she pays them $425 a month, and then uses the card for about $300 a month to live on. Has been doing this for years now. No "new" usage, and certainly nothing large or extravagant.

Do you think there's a chance they might both sign off? If so, would she still have to go to the meeting?

Correct, you and your mom should not even lose any sleep over those cards.

However, your mom still has to go to the meeing, although its called a "meeting of creditors", the real purpose of the meeting is to have the trustee interview the debtor. (the trustee is appointed to act for all creditors collectively, so individual creditors do not generally show up unless they have special circumstances). Also, creditors don't "sign off" on the bankrutpcy so to speak, their only power is to object to the discharge of their particular debt if they have a reason to. The job of the trustee is to determine if there are any non-exempt assets that he can liquidate (turn into cash) to pay to the creditors.

Again, its not so much a matter of people signing off on the BK, your mom has filed BK, and it will result in a discharge unless the Chapter 7 or US trustee objects (which really isn't that common unless the debtor really screwed up or is really trying to commit fraud).

[Whittio]

Well, I thought it sounded like a good dream. I just figured if both cards discharged their debt prior to the meeting, there wouldn't be a need for the meeting. Pipe dream. But then again, it's not ME that has to go to the meeting either..

[HHM]

Well, I thought it sounded like a good dream. I just figured if both cards discharged their debt prior to the meeting, there wouldn't be a need for the meeting. Pipe dream. But then again, it's not ME that has to go to the meeting either..

Also, strictly speaking, the debt isn't "dischcarged" until you receive your discharge from the Bankruptcy Court.

Having the creditor merely "write off" or "charge off" the account or list it as "included in bankruptcy" doesn't really mean anything vis-a-vis your obligation to pay the debt. Technically, if the creditor list the debt as "discharged in bankruptcy" before you have received your discharge is an inaccurate statement. What they should be reporting is "included in bankruptcy".

Again, another technicality, Bankrutpcy doesn't eliminate your liability on the debt, a discharge is a permanent injunction against the collection of the debt owed. (as a practical matter, the result is the same for if no one can demand payment of the debt, how can you have an obligation to pay, but for some reason, there is a legal distinction drawn between the "obligation of the debtor to pay", and the "creditors right to demand payment.", what gets eliminated in bankruptcy is the "creditros right to demand payment of the debt".)