Often unpaid debts can change hands many times during the course of attempted payment, especially when the debt is old. It is often impossible to list all the collection agencies who have handled a specific debt while filing your case. It is also unnecessary. You do not need to be certain which company holds the debt right now. You really only need to list the original creditor and if possible, list one or two of the subsequent collection agencies.
Movement of debt from one collection agency to another officially begins when the creditor officially “charges off” the debt. Creditors must charge off revolving accounts after 180 days of delinquency and installment loans after 120 days, under federal laws. A collection agency can purchase the debt for pennies on the dollar and has the right to collect on the full balance. They are also allowed to accrue new fees and interest at this time. Another option is for the original creditor to assign the debt to a collection agency that collects the debt on behalf of the original creditor.
You should always pull your credit report before you file for bankruptcy. A current credit report will give you the updated creditor list you will need in order to file. You will need to list the original creditor first in your bankruptcy paperwork and then any subsequent creditor in a second column. If you have forgotten the name of the original creditor it is better to list the current collection company rather than not list anything at all. If you receive a statement from an accidently omitted company you must notify them of your bankruptcy filing and give them your case number. Make sure you have proof that you attempted to contact them with this issue, so they can’t sue you later. To do this, you may want to fax the information or contact them via certified mail so you will have evidence that you notified them of your bankruptcy.
Before and During the Filing of Bankruptcy: You’ll want to do your best to list all the information you are aware of and to contact all the companies that you owe money to so you can decrease your chances of a future lawsuit simply because the collection agency had no idea you filed bankruptcy.
Please get in touch with one of the southern California bankruptcy attorneys at Westgate Law if you have any other questions regarding filing for bankruptcy.