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Do You Have to List All Debt Collection Agencies in Bankruptcy?

Posted By Allmand Law Firm, PLLC || 19-Sep-2013

What You May Not Know about Chapter 7 Bankruptcy

Some debtors may get confused about the aspect of listing all debts when you file your petition. You are required by the bankruptcy court to submit all details in relation to outstanding debts, including creditors that are owed and their outstanding balances. But, what happens when more than one collection agency gets a hold of one delinquent debt? Do you have to list each agency or just the original creditor?

Your Dallas-Fort Worth bankruptcy lawyer or trustee may advise you on how to list your creditors and debts. In many cases, listing the original debtor is good enough, but if you have information regarding the collection agency that has the same debt, you may want to include this information on the list. In simpler terms, a creditor will charge off an account after it has been left unpaid for a certain period of time, depending on the type of debt it is.

Then, a creditor will either assign the debt to a collection agency to continue collection efforts on their behalf, or they may sell it to a collection agency who then obtains the right to collect what is owed on the balance. This is why fees and interest accrues on such balances. Because it is possible for a debt to change hands depending on how old it is from one collection agency to another, it can be helpful to pull your credit report prior to filing bankruptcy to ensure all creditors will be listed.

If you file bankruptcy and a collection agency contacts you about a debt that you already included in your filing, you or your attorney can forward your bankruptcy case number to the agency so they can update their records regarding the debt. As always, review your situation with your attorney or bankruptcy expert.


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