Can Your Creditors Still Sue You After Bankruptcy?
by JennaI think my biggest fear after bankruptcy was that my creditors would still be able to collect money from me, or to sue me/ garnish my wages somehow.
When my husband and I were finally able to declare bankruptcy, we had already been dealing with collection companies for several years. They regularly called us at work, at home, and they called several of our family members as well. We rarely answered the phone when it rang, and many companies called early, and late (past the hours they are allowed to call.)
We also had two judgments, one mine, one my husbands. The final straw that tipped the scales was a wage garnishment. It was the second time my husband’s wages had been garnished, and it was because of a medical bill that was way overdue.
The month he learned of the garnishment (which went through his work, so all the HR people knew about it) we would not have been able to pay our rent, or buy food or gas if it went through. So, we decided that it was finally time to end the mess and just declare bankruptcy. We took $200 as a down payment to a lawyer, who thankfully agreed to a payment arrangement.
Honestly I think he only agreed to the payment arrangement because we were totally organized. Before we approached him, we put together a 3 inch binder filled with all of our bills, and all of the information we knew he would need.
He took our case, stopped the garnishment, and two months later our bankruptcy was discharged.
For the first few months afterward, I kept waiting for the phone to ring. It did still ring frequently, but by then, I was happy to answer it because I knew that once I did, those collection reps could never call me again. It was very simple. They called, and called. It was usually an automated call which meant that I had to sit on the line for ten minutes or so. Once I reached a person, I gave them my case number, date of discharge, and my lawyers name and info.
After that, most of the companies never called back again.
I did have some lingering fears. For instance, I knew that we had debts that we had not listed on our bankruptcy application. We didn’t list them because our debt had been sold over and over so many times that we didn’t really know who owned it at that time.
Still, one by one those companies got in touch with us. I gave them all of our information too, and they have not bothered us since.
In my experience, a company cannot collect from you, or sue you once you have declared bankruptcy, as long as you give them the information they need. Even if, like us, you did not include the debt when you filed, it was still included as long as you had the debt before you walk into the lawyer’s office to file bankruptcy.
It is important for me to say though, that we had one medical bill that we incurred between the date we filed for bankruptcy, and the date it was discharged. That debt, we did have to pay. Apparently once you file, that’s it. It cuts off from the day of filing, not the date of your discharge.
We did not have any credit cards when we filed for bankruptcy, so I cannot tell you for sure whether or not we would have been able to keep them open. I can say that we had a very easy time opening up secured credit card account about six months after our bankruptcy. I seriously doubt that we had to wait six months to open those accounts either. We only waited to give ourselves time to get everything straightened out before we jumped back into the credit market.
Also, for those who might be interested, my first unsecured credit card after bankruptcy was a Target credit card, about two years after my bankruptcy was discharged.
Have a question for me? Leave a comment below and I’ll answer it!
Keep Reading:
- Repairing Your Credit After Bankruptcy Part 1
- Repairing Your Credit After Bankruptcy Part Two
- Will Credit Counseling Hurt Your Credit Score?
October 25th, 2008 at 00:32
When filing, you are supposed to list all of your debts on the bankruptcy. If there are any accounts that you wish to keep open (say, a car loan if you want to keep the car, or perhaps a credit account, a personal loan from a friend or relative), you reaffirm those accounts when you go through the bankruptcy process. Reaffirming just means that you are saying that you are legally responsible to pay the accounts that you reaffirm, and they will not be discharged (with the other debts) through the bankruptcy. The entity you have the account with must agree to reaffirm the debt with you, but apparently many are willing to do this… if for no other reason than that you are still legally obligated to pay them.
If you had a credit card, you probably could have kept the account. But then you would still have to pay the debt on that card, so especially if you have a card with a high balance it probably wouldn’t make sense to do that. I have read that, if you did have a card with a small balance, you could reaffirm that to help rebuild your credit after filing. This would help because you would still have credit granted to you to use, and paying on time would lengthen the positive payment history on your credit report.
The only thing you wrote that gives me pause… I would strongly caution anyone against leaving a debt off of their filing just because they do not know who now owns the rights to the debt. You may have lucked out with the creditors that you did not list. I don’t know how thoroughly collectors check these things, but the fact that you had valid information to back up your claim that you filed for bankruptcy may have been enough for that particular collections agency. They may not have actually checked your bankruptcy filing to ensure that the debt they were trying to collect was listed therein.
I would think that, even if a person did not know who currently held the debt, they should at least list the initial account or the last known agency that held rights to that debt. To anyone who is currently filing or planning to do so, you should definitely ask your lawyer about this if it is an issue that might pertain to you. If you are going to deal with the consequences of filing, you may as well ensure that you discharge all of your debts (unless you make the conscious decision to reaffirm a debt).
Also, it is good to know that if a debt is inadvertently left off of your filing and you realize it after the bankruptcy closes, you can have your lawyer file an amendment to add the omitted debt, which will discharge that debt as well. I’m not sure about all the details about this, but it is an option. Again, it’s another thing to talk to your lawyer about.
November 10th, 2008 at 00:28
We are having the house discharged in a bankruptcy. Once the debt of the mortgage is discharged who is responsible for the HOA and COA fees? Is it the bank (Trustee) or us?
Thank you for your time,
Chris
November 18th, 2008 at 19:48
My husband and I are planning to file bankruptcy.My question is, we opened up a new account with Discover in hopes to transfer a higher balance over,however Discover only transfered half because of our credit. This account is so new we haven’t received a bill yet,should we transfer the Discover amount back to the original account,before we file?
January 2nd, 2009 at 21:16
can a crediter cakk my sisters house because im in dept with capital one credit card they keep calling my house but im always at work . but i think its against the law to call a family member because there telling my sister how much i owe on my dept and everything can u give me an answer i live in mass.
March 21st, 2009 at 06:39
Sir:
I am a 100% disabled veteran. My wife and I 67 and 68 years old, repectively. Of our 7 children, one died; five are adults; and, one remains our dependent attending college. He is 21. I served 18 years in the United States Marine Corps (4 years enlisted Active Duty; 2 years enlisted Inactive Reserves; and, 13 years as an Reserve Officer.
I was on extended Active Duty when I suffered a near-death injury. I began treatment with the VA for PTSD in April 2003. I filed my Disability Claim in Novemeber 2003 for PTSD and physical medical issues directly related to my military service. In September 2006, I was awarded 100% disability compensation on a disability rating of 130%. It took over 3 years to process my claim. Normal time frames for processing a claim was 6 to 8 months.
In March 2005,my wife and I were forced into filing a voluntary, individual Chapter 7 Bankruptcy in 2005 (under the BA of 1978 as amended) due to the nonfeasance by the NY Regional Office of the VA (recently learned due to misconduct/corruption as widely reported in the media/press).
I am not an attorney but filed PRO SE. I attended the 341 Hearing about a month after filing. I advised the Trustee that I had pending litigation involving a personal injury matter dating to 2003.
At the time of filing, we were insolvent. Our income was about $3,000 a month and our expenditures about $6,000 a month. $1100 of income was from Social Security Disability. We had absolutely no assets. We had at that time a minor child living with us (who now attends college and remains our dependent).
In July 2005, I received a DISCHARGE from the Bankruptcy Court (EDNY). From the time of the 341 hearing in April 2005 until Janurary 19, 2009, I had not heard from the Trustee (even though I was listed as a Pro Se filer). On that day, I was advised that the original trustee vacated his trusteeship; that a new trustee had taken over; and, that their existed $26,000 in unsecured, non-priority claims. I learned this from my personal injury attorneys (who were never listed as attorneys of record for the Bankruptcy).
I disputed the claims listed in the Registry of Claims with the new Trustee noting that they were dated 16 months AFTER my discharge and about 20 months AFTER the Court Notice for Creditors to file objections to discharge. I also noted that one claim was listed as “secured” but that is false. The only secured loan I had was for my home for which I paid “IN FULL” the mortgage due in September 2002.
Since 2003 until 2009, I received NO communication from the Trustee or the Office of Trustee. I did receive a Court Clerk Notice that my status had changed due to “DIVIDENDS” received, but (1) I never received any “DIVIDENDS”; (2) this notice was dated more than a year after my DISCHARGE; (3) there were NO objections filed to my Discharge; (4) there exist no Section 523 or Section 727(a) Exceptions; (5) the Registry of Claims indicates that these creditors filed their claims more than a year after the discharge; there is NO proof or justification of claims; (6) the 2 largest claims were “charged off” more than 5 years BEFORE my filing for Bankruptcy; etc, etc.
My personal injury attorneys notified the new Trustee that my personal injury case was going to trial. the Trustee objected to the trial stating she was going to FORCE a settlement so that creditors could be paid.
I represented myself at the NYS Supreme Court hearing (Staten Island) taking the position that my trial should proceed. It was only at this hearing that I learned that defendent’s Allstate Insurance attorney offered a $150,000 settlement. [I was initially advised of an offer of between $25k and $75k). The judge ruled that the matter belongs in Bankruptcy Court (I refute this citing both Statutory and Case Law).
So now, following 3 surgeries; more than a dozen invasive medical procedures; six years of continuing treatment sustained in the personal injury — the Trustee is adamant in coercing a forced settlement in which I will receive less than the personal injury attorneys and after settling the Trustees estate less than $40k.
A review of awards and settlements for the 3 surgeries (not including the SPINAL injuries sustained for which 4 VA Neurosurgeons recommend surgery)averages between $550,000 and $2.4 million.
I claim a DISCHARGE is a DISCHARGE. The Trustee argues differently.
I claim that Statutory Time Limits prevent non-secured creditors from making any new claims. The Trustee argues otherwise.
I claim the existence of many procedural (FRCP and FRBP) have been violated. The Trustee disagrees.
I claim my Constitutional Right to trial by Jury (7th and 14th Amendments) have been violated by the Trustee. She disagrees.
I have asked the Trustee to agree to a Conference with the Judge pursuant to the FRBP. She refuses and is adamant in filing a Motion.
The Trustee refuses to provide “Proof of Claim” which involves the specifics of the debt; agreements signed; when signed; by whom signed; under what auspices I incurred these debts, etc.
I currently have income of about $4,600 a month (from VA Disability and Social Security). My current monthly expenses are about are about $4,100 a month (rent,utilities, food, etc.).
I called the Pro Se Office at EDNY for assistance and advice. I also wanted to be put into contact with a PRO BONO attorney. I’ve heard nothing in 4 weeks.
I could use some advice. Thanks,
April 9th, 2009 at 10:25
People like you make me sick!!! Just the thought that you can wake up one day and be cleared of all of your problems while the rest of us clean up your mess just disgusts me!!! I sold my house and as a nice person I held a 2nd mortgage and paid settlement costs for the newlyweds with a baby. I actually paid the mortgage company some money so that they could get a good start. Well needless to say, 18mos later they decided not to pay anymore bills. They hadn’t paid me most of that time either. That is pretty much the end.
They claimed bankruptcy and 2 months later I am out $40,000! The first bank gets to sell the house and the township gets their taxes.
Meanwhile…they both work, had a ton of lights, decorations and trash at their house on Christmas, a new car, a new apartment….
HOW IS THIS FAIR? THEY ARE LIVING OFF OF MY HUSBANDS RETIREMENT MONEY! NOW HE HAS TO WORK ANOTHER 2 YEARS BEFORE RETIREMENT!
I HOPE YOU ARE PROUD OF YOURSELF. Have a nice day
April 9th, 2009 at 12:31
I have a few corrections…
This above comment does not apply to everyone but it does apply to Jenna and similar cases.
The township does not get the taxes either, but I still donot get anything.
MY HUSBAND HAS TO WORK ANOTHER 4 1/2 YEARS AND SAVE REALLY HARD TO RECOUP OUR RETIREMENT!
April 20th, 2009 at 10:17
My attorney has filed my petition for bankruptcy and my hearing is scheduled for May 14, 2009. When looking on line at my credit card accounts, I notice that they have almost all disappeared except for one. Suddenly, Bank of America has come up with a whole new account number and is claiming an amount due of approximately $5,000. I claimed the two accounts I had with them in my petition for bankruptcy and this new account number is NOT one of the two I claimed. They have gone ahead and MADE UP an entirely NEW account number. It appears that I am now responsible for paying that new account. Is that possible? Please advise.
May 4th, 2009 at 10:08
Hi, I am recently separated and my ex left me with a huge mortgage payment, and major debt. When we were together he borrowed a huge amount of money from his parents and now they are expecting me to pay half of the debt back. I paid off most of our debt except this one and the mortgage. The house is in foreclosure and his parents are threatening to take me to court for amount owing. After the foreclosure my ex will probably force me into bankruptcy with him as he can’t affort to pay anything back. What are my options?
June 12th, 2009 at 15:19
This was extremely helpful but I have a question or clarification.
June 12th, 2009 at 15:23
I have a former tenant who chose not to pay their rent. They filed for bankruptcy in May 2008 and it closed in March of 2009. I have a judgement against them for $3000 dated 6/5/2009. This dismissal has not yet bee set.
The former tenant says he is “re-opening his bankruptcy” and adding this debt to it. Is this possible to leverage this in this manner even after the bankruptcy is closed?
July 25th, 2009 at 20:47
My husband filed for bankruptcy several yrs after I had and claimed all of our medical on there. The court accepted it and there was no disagreement by anyone. The court paid out on the accounts and discharged the rest. The hospital turned around and sued me for the total amount of the accounts. Can they do that?
They also tried to garnish my checking account again even though they know I onle have disability. Can they keep trying to garnish me when they know disability is all I have?
They also served me with papers to appear in court again and supply all my finacial stuff. When I called their office to ask them what they wanted I was told they just needed a new payment schedule. I informed them that they had not sent me a new one in 1 1/2 yrs. But I had written down my payments on the old form and made all payments on time. The form clearly says they will garnish you IF you miss a payment which I had not done. Can they do this?
I mean sheesh, take me to court for a payment schedule and they know I’m disabled. Thanks for answers…
October 2nd, 2009 at 15:59
I let the company I work for use my personal credit card and the debit is up to 67,000.00. The company is an LLC in Texas and not doing very well. Is there anything I can do tomake sure my credit card gets paid off by my company? Thanks