Debt Negotiations with Chase, Discover, Citi, Capital One, GE Money Bank

[catleg]

I think, and hopefully someone can back this idea up:
Anyone who buys the debt from the original creditor is an "assignee".
Since this can happen repeatedly, there is no reasonable way that the debtor can be responsible for knowing the ownership of the debt. Especially in this day and age of securitization.
Therefore it should be sufficient to list just the original creditor in a BK petition.
True?

And further, anyone filing a proof of claim as an assignee should probably be challenged to show that they are the legal owner of the debt, right?

Now, to put a really fine edge on it, suppose you file BK and notify the OC, even though the debt has been sold 3 times already which you may possibly be aware of. Are you under any obligation to notify the most recent JDB of your bankruptcy petition so he can file a proof of claim? Is the OC obligated? Can you play dumb here? In other words do we have to play nice and make life easier for the JDB scum or can we make their life a little more difficult?

[optimistic1]

When it gets sold, do you need to list both the original creditor and the new JDB in your petition?

[BigJohn]

In a Chapter 13, what makes keeping your records difficult is when a debt is sold after you file. They do not notify you of the sale nor of the purchase. You find this out on your own, that is if you find it out.

I guess where it can get really mixed up is if the debt is sold after bankruptcy and then is sold one or more times after that.

[spidge]

I have about $37,000 in CC debt that I have not made a payment on since August 2007. I have been making small payments to an attorney to file BK and as long as I make a payment they keep the creditors at bay, for the most part. I have settled one of the debts outside the Attorney and would like to avoid the BK if possible. Is the debt reaffirmed through the attorney causing the clock to be reset? I have had a couple 25% offors but have not had the cash on hand to settle. Do most allow payments of some sort? I also have a notebook to keep records of conversations and communications.

[BigJohn]

BigJohn, Great explanation. I think there is much confusion related to CA's. The difference between a CA buying the debt (JDB) and a CA only assigned to attempt to collect the debt under contract is a distinction that escapes many debtors. It is important to track "WHO" owns the debt.

After we filed Bankruptcy 13, I believe it was 4 creditors sold the debt we had with them to Junk Debt Buyers (JDB). Keeping track of this debt seems to be a new challenge for me. I guess it can get more interesting if some of the JDBs sell the debt to another JDB while we still are in bankruptcy.

[BigJohn]

If the debt is 10 years, I would say the JDB has almost if no documentation pertaining to the debt. Newer debts probably have more documentation but I would say a person would have to be fairly sharp to win a case by themself in court.

I stopped paying my debts about one year ago.

The credit cards were all unsecured.

I had a $30,000 SBA loan that went unsecured.

We had a furniture loan for about $10,000 that went unsecured.

[Confuzed]

Big John,
How old were your debts? Unsecured credit card debt?
Most of my research/reading states that many JDB don't have proper documentation to prove the debt (unsecured cc debt) was yours and the original bank does since they have the statements and original agreement. There is another forum where people have had a case dismissed because of lack of evidence. I am mainly referring to JDB after the OC has charged the debt off and at least a year has passed.

[treehugger1]

BigJohn, Great explanation. I think there is much confusion related to CA's. The difference between a CA buying the debt (JDB) and a CA only assigned to attempt to collect the debt under contract is a distinction that escapes many debtors. It is important to track "WHO" owns the debt.

[BigJohn]

POF is almost like DV but POF is provided to the court whereas DV is provide to you.

"(I've read on here that usually original creditors/banks do not sue for unsecured debt but collection agencies do"

I got sued by 2 creditors, both of them banks.

Original creditors assign the debt to collection agencies but from what I have seen, the collection agencies that are working with assigned debt don't seem to sue, they turn the debt back to the original creditor.

There are times the collection agency buys the debt. In this case the collection agency is generally known as a JDB (Junk Debt Buyer).

At times it is hard to know who owns the debt and who is working as an agent (assigned) to try to collect the debt. Being some of these people don't seem to be the most honest of people, I suggest keeping good records.

[Confuzed]

That is what I thought I read and that's why I asked because isnt it usually the other way around? In the case of collections, a JDB, suing, isnt it usually the case that they cannot submit proof that you owe the money (I've read on here that usually original creditors/banks do not sue for unsecured debt but collection agencies do and they usually do not have the proof when you DV them or show up to fight a judgment. I am beginning to worry now after reading your case but on the other hand many people win in court/make the JDB go away because they lack the request of DV. Is POF=DV? Please explain, thanks again!!!

[BigJohn]

I hope this will help.

If the original creditor sells the debt to another business, these businesses that buy the deby are generally called JDB (Junk Debt Buyers). Before and after we filed, some of our creditors sold some of our debt to other businesses (JDB - Junk Debt Buyers). When we filed bankruptcy, creditors had to show proof of claim (POC) that the debt was legitimate. In our case, all the JDB's showed proof of claim (POC) but some of the original banks did not.

[Confuzed]

Big John, can you clarify that part where the JDB "filed proof of claim" and the banks did not? I am not clear on what you mean. I would really appreciate it as this forum has really educated me on how things work.

Thanks!

[BigJohn]

All the Junk Debt Buyers that have bought my loans filed POC (proof of claim). 8 banks did not file POC.

[treehugger1]

Cat, I've asked this question also. How much weight is given to POC where the account is buried in the entire debt portfolio issue; especially with JDB's? It can't be easy. I recently requested a DV on an "alleged" Cap! account and the legal firm sent me a couple of years of recent bills, and a copy of terms and conditions from a year or so previous to that. My guess is that this CC is over a decade old with no original contract easily obtained. I'm requesting clarification on the information sent to me, but no response as of yet. Due to the strange information I was sent, I believe it is my right to move toward a request of original contract.

In terms of attempting to work out agreements, I had pretty good luck with most accounts, but then a couple of local creditors sued me, got wage garnishment, and that ground the other agreements down. You need to get everyone on board if you trying a settlement. And, if you miss 1-2 payments, you are back where you started.

[catleg]

Let's say I get several of the lenders to agree to a reduced payoff. Once I have their agreements in hand can I then file Chapter 13 using the lowered amounts as the balances due?

Well, your ch 13 plan is based on your disposable income. Unless you can get the balance so low that your payment covers 100% of the balances in less than 60 months it doesn't accomplish anything.

I would be interested in hearing any ideas about how to reduce the % of claims filed by unsecured creditors, anyone know if JDB's are less likely to file POC's?
Seems to me a lot of fresh charge offs are bought by investors who then slice and dice and resell the portfolio in pieces, maybe at this point nobody would be on the ball enough to file the proof of claim.