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Who does court consider creditor in bankruptcy/CA,JDB or OC?


Guest Happybluesky
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Guest Happybluesky

In a bankruptcy situation, in this case involving all unsecured credit card debt, and where all accounts have been charged off - but time well within SOL - does the court consider the OCs, or the CAs and JDBs as the creditors.

Related to this, if true that OCs can sue people for charged off debt years later, but within the SOL, I would assume it is the OCs that the court would be concerned about - not CAs, and certainly not JDBs - who may have zero communication with OCs anyway.

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Guest Happybluesky

Ok, based on very helpful 1st reply, here are two follow-up questions:

If alleged debt is with JDB, would OC then be barred from suing in the future, after completing bankruptcy?

Does the court in some way communicate with the OC to prevent them from suing in the future, or is there no danger of this anyway, once debt has been purchased by a JDB?

One comment I have is that, ironically, it seems as though the very JDB that we might viciously DV to win in court, we might actually want to be able to validate the debt, in the sense of accurately connecting it to the OC, for the purpose of bankruptcy!

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If alleged debt is with JDB, would OC then be barred from suing in the future, after completing bankruptcy?

If the JDB owns it, then the OC has no more legal standing to sue (bankruptcy or no).

One comment I have is that, ironically, it seems as though the very JDB that we might viciously DV to win in court, we might actually want to be able to validate the debt, in the sense of accurately connecting it to the OC, for the purpose of bankruptcy!

Not necessarily. If you're filing for bankruptcy, why does it matter if they validate? You could just as easily list the alleged debt in the bankruptcy papers as belonging to JDB, formerly owned by OC, and that should cover your bases as far as the unlikely event of OC later coming back to sue.

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What most BK attorneys do in this situation is list both the OC and the JDB. There is no charge based on the number of creditors so you put both addresses in the creditor matrix. Both are then served and there is no issue about an OC or JDB not knowing.

Yup. Shotgun approach. Name all of them, including the CAs. That way they all get notice from the court.

One more thing to understand is that if you have a no-asset chapter 7 discharge, it actually doesn't really matter if they are listed or not (or even notified or not). This takes a little explaining to understand why:

Think on it this way. If you miss a creditor you would normally go back and re-open the case, file the papers for the additional creditor, and it would go through the whole court process. This is a huge waste of time if it would not change the outcome of the case. Therefore, if your case is a no asset case and all creditors get nothing anyways, the BK system recognizes that there is no point in going through all that and it defeats the "fresh-start" principle....

So in a no-asset discharge all you do is send anyone who contacts you about a pre-filing debt, listed or not, a copy of the no-asset discharge notice and you are done. As soon as they get that, they are barred from every contacting you about it again.

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