D is for Debt Buyer

iStock 000018936141SmallD is for Debt Buyer in the Bankruptcy Alphabet. Debt buyers are companies around the country which purchase debts for pennies on the dollar and then attempt to collect them. Examples of such companies are Portfolio Recovery Associates, eCast Settlement, B-Line, Midland Credit Management and others. I confront these types of companies frequent as a Pittsburgh bankruptcy attorney.

These companies are most prominent in Chapter 13 bankruptcy cases, particularly in cases in which people file with credit card debts. Let’s say that in your situation, you have debts with Citibank, Discover Card and First Premier credit cards. When your case is filed, you and your attorney have filed papers indicating that you have those credit card accounts. The card companies are notified of the case filing by the Bankruptcy Court. The creditors have approximately 5 months from the date of filing to file their “proofs of claim”. Those are the court documents filed by the creditors to indicate the pertinent information about their claims, including, but not limited, to the overall amounts owed.

You might be surprised to learn that Citibank, Discover and First Premier won’t likely file those proofs of claim themselves, but instead, that the proofs of claim have been filed by these types of debt buyers.

Okay, much of this is basic bankruptcy procedure, and really not that big of a deal. It gets more interesting however when those very same debt buyers have purchased stale debt. Let’s say, you have a credit card account from you haven’t used or paid on in the past 10 years. Suddenly, you might have a good case to turn the tables on the debt buyer for violating the statutes of limitations. In a recent case, I got the Bankruptcy Court to issue an order to have the debt buyer pay my own legal fees for just such a violation.

Another problem is when debt buyers will purchase old debt that has been wiped out (discharged) from bankruptcy. The debt buyers won’t necessarily contact the actual customers to collect the debts, but will instead surreptitiously file adverse information to the three credit bureaus. Obviously, this is wrong and can be fought by using laws such as the Federal Credit Reporting Act, which protects consumers from erroneous credit reporting.

Let me know if you have questions or comments about debt buyers!

Here are more entries from the Bankruptcy Alphabet:

Debt Relief Agency from Metro Richmond Bankruptcy Attorney Mitchell Goldstein;

Debtor from New York Bankruptcy Attorney, Jay Fleischman and Debtor from Taylor Michigan Bankruptcy Attorney Christopher McAvoy;

Declaring Bankruptcy from Wisconsin Bankruptcy Attorney, Bret Nason;

Deconsolidate from Omaha, Lincoln Nebraska Bankruptcy Attorney, Ryan Caldwell;

Discharge from Northern California Bankruptcy Attorney, Cathy Moran and Discharge from Los Angeles Bankruptcy Attorney Mark J. Markus and Discharge from Kona Bankruptcy Attorney Stuart Ing and Discharge Order from Chicago Bankruptcy Attorney Daniel J. Winter;

Disclose from Marin County Bankruptcy Attorney Catherine Eranthe;

Disclosures from Colorado Springs Bankruptcy Attorney Bob Doig;

Divorce from Jacksonville Bankruptcy Attorney Monica Shepard;

Do’s and Don’ts from San Francisco Bankruptcy Attorney Jeena Cho and Do’s and Don’ts from Livonia Michigan Bankruptcy Attorney Peter Behrmann;

Documents from Philadelphia Bankruptcy Attorney, Kimberly Coleman;

Domestic Support from Philadelphia Suburban Bankruptcy Attorney, Christopher Carr;

DUI, DWI and OVI from Cleveland Bankruptcy Attorney Bill Balena;

Domicile from Miami Bankruptcy Attorney Dorota Trzeciecka;

Discharge from Los Angeles Bankruptcy Attorney Christine Wilton;

Dischargeable Debt from Chicago Bankruptcy Attorney Kyle A. Lindsay;

Debtor from Allen Park Michigan Bankruptcy Attorney Christopher McAvoy;

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