Missed a Creditor- Ch7

[Amy030504]

Hello all,

I filed for Ch7 bankruptcy in February 2011 and all debts were discharged in April 2011. I just found out today (by certified mail) that a debt that I have from October 2008 was NOT included in the bankruptcy and I am being sued in civil court for it. Apparently it wasn't reporting on my credit, wasn't with a collection agency and 3 years after the fact- I had forgotten all about it.

I read something about a debt being included even if it wasn't included on the bankruptcy forms if there were no assets? My decree simply says "The debtor is granted a discharge under section xxx of title xx, US Code (Bankruptcy code).

Would that mean I would be able to have that discharged? Do I need to re-open the case and include it? If I don't need to re-open because it was a no-asset case (which I think it was?)- how do I go about informing the creditor?

Any help would be greatly appreciated.

[keepmine]

You need to contact your bk attorney.

[AngelinaCat]

I agree with contacting your attorney, however here is what happened with us:

We had service with a telephone company--still a land-line at the time--with unlimited long distance service at the time we filed. While we were in the course of our Ch7, our telephone service was taken over by AT&T, and they didn't give unlimited long-distance. We did not know this had happened because of the Automatic Stay. So after we were discharged we got a bill from AT&T for $586.00. We sent them a cease and desist letter along with a copy of our Discharge Order, and informed them that the debt was discharged. The debt was sold a couple of times, and each time the JDB contacted us about the debt, we sent the same letter and copy of the DO. We also courtesy copied these to our trustee and judge.

Eventually they shut up and went away...

[tobee43]

all creditors have the right of property notification. i have heard some say because you filed everything you owned at the time is included listed or now. i don't necessarily agree with this as again, all creditors have the right of notification and the opportunity to fight the dismissal of their debt if they feel they have any stating.

hopefully as angelina points out, they will just go away.

[filed]

Amy, I do believe it is a very important detail, whether you were, in fact, a no asset case. I believe what governs is that if you were a no asset case, then the creditor would have been due no recovery even if they had been properly noticed. As long as they have no basis for alleging fraud, they likely have no valid claim. Of course, your lawyer will be able to give you the best advice.

[frogger]

In a Chapter 13 case, the debt would not be discharged because the creditor had not been given a chance to participate.

In a Chapter 7 asset case, the same.

In a Chapter 7 no asset case, there was nothing for the creditor to participate in.

Send them a copy of your discharge and move on...........

[AngelinaCat]

I should add that in our case, which was an Asset Ch7, our major creditor was the IRS, and any monies that the trustee collected went toward them.

One of our medical providers petitioned to prioritize their claim above that of the IRS. That petition went down in flames....

[malf1204]

I just went through this in Maryland. The creditor refused to back down because they were not "listed " in the Chapter 7 no-asset BK. I re-opened my case (no fee by statute) and filed a request for an order to show cause as to why they should not be held in contempt for a stay violation. The creditor responded alleging fraud. The judge gave them 20 days to file an AP or refund my garnished tax return. They sent me a check in two weeks. The Judge made it clear that the debt was discharged but since the creditor did not receive notice of the original BK they had to be given an opportunity to file an AP. I would file a motion to dismiss the State court action based on Bankruptcy discharge. It has been my experience that the State court will error on the side of caution and make the creditor prove the debt was not discharged.

[LadyInTheRed]

If you have already been sued, you may have to do more than send a copy of the discharge to the creditor. If the creditor doesn't willingly dismiss the case, you may need to file an answer alleging as an affirmative defense that the debt was discharged in bankruptcy.

[IBroke]

This is an interesting topic.

I was never too concerned about missing a creditor since I was a no asset case. In fact, I believe I even missed one and as a result, was contacted after my discharge by a collection agency. As soon as they were aware of my CH7, they stopped all collecting efforts.

Now, the upcoming CH7 of my mother might be a bit tricky. Although she has no money, stocks or jewelry, the furniture in our home owned by her could potentially exceed the allowance. So she could end up as an asset-case. In addition to that, she has a huge number of creditors. We'll be very careful to list everybody but I'm sure we will miss at least one.

The good thing is that although that debt wouldn't be discharged, it would still be noncollectable due to its age (90% of my mothers debt is older than 5 years) - and that means that the SOL would protect her in case any lender would try to sue at a later point in time.

[tobee43]

I just went through this in Maryland. The creditor refused to back down because they were not "listed " in the Chapter 7 no-asset BK. I re-opened my case (no fee by statute) and filed a request for an order to show cause as to why they should not be held in contempt for a stay violation. The creditor responded alleging fraud. The judge gave them 20 days to file an AP or refund my garnished tax return. They sent me a check in two weeks. The Judge made it clear that the debt was discharged but since the creditor did not receive notice of the original BK they had to be given an opportunity to file an AP. I would file a motion to dismiss the State court action based on Bankruptcy discharge. It has been my experience that the State court will error on the side of caution and make the creditor prove the debt was not discharged.

this is my general understanding as well, and since you lived it, i'm sure you know it all to well. good job for requesting the order to show cause. fraud is a difficult proof, no matter what postition the creditor is in. (that is, unless there is blatant fraud). the judge pointed what my understanding is/was

:The Judge made it clear that the debt was discharged but since the creditor did not receive notice of the original BK they had to be given an opportunity to file an AP.

it's fine it's over, it's a another hassle one doesn't really need.

[jst4f]

It is also my understanding that they have no grounds for collecting if you are a no-asset BK7. You find that information in PACER in the TT statements.

Has the company actually filed a suit or is it a threat to file? If a threat to file then send them a firm but professional letter threatening to take them to BK court if you are a no-asset BK7. It has been my experience that they go away. If you are an asset case or they have filed a suit, get ye to an attorney ASAP. Best of luck