He's seven months into a bankruptcy and just received a letter from Lowells collections. Saying his account has been frozen until after his discharge.
The original virgin debt was listed in the bankruptcy. Sooo is this legal and will he have to pay?
My Uncle is Mid-Bankruptcy, Virgin have just sold his debt to a collection agency. They're saying they'll collect after he's discharged?
byu/Talonsminty inpersonalfinance
Posted by Talonsminty
7 Comments
No. Any and all debts owed going into bankruptcy, and enumerated to the court, will be discharged. Any attempts to collect afterwards are null and void.
Once a debt is included in a bankruptcy filing, creditors and debt collectors are legally required to stop all collection efforts. This is covered by an “automatic stay.” Since the debt was listed in the bankruptcy, it will be discharged when the process is complete. Your uncle should not have to pay it. The collection agency may be trying to pressure him into paying, but they are not legally allowed to do so. He should inform his bankruptcy trustee about the letter and keep all documentation.
If the debt is included in the bankruptcy they’re not supposed to pursue the debt out of court.
Tell him to talk to his bankruptcy attorney…. that’s what they’re for, dealing with things like this.
Is he in the UK?
No idea about the laws there but in the USA creditors can not contact you or attempt to collect a debt once they’ve been notified you’ve filed bankruptcy. It defeats the purpose of bankruptcy and is a travesty to the legal system.
Best option is have him notify the lawyer what’s going on. If they weren’t aware of the debt they may need to amend the bankruptcy filing to include it.
No, it will get wrapped into the unsecured pool and discharged. Any subsequent attempt to collect would be subject to the discharge injunction.
Nope. Those crooks can’t do that. Report the situation to the bankruptcy court.
They will try to trick you or him into agreeing to make a small payment in good faith once either of you do that you’re on the hook to pay the balance.
Are they legally supposed to do that nope, well I absolutely try and hound you till the ends of the earth, Yes.