Interviewer: So what other common abuses have you seen?
Andrew Campbell: The best kinds are really the ones that are done in writing, because they either exist or they don’t exist. If they’re in writing, those are typically after the person filed for bankruptcy, and they notified the debt collector. It’s been a couple months since they filed. If a debt collector sends a letter to my client, I’ll file a lawsuit, because what they’re doing is, they’re saying is you owe us money. You’re personally liable on this debt. When you file bankruptcy, you’re saying, these are my creditors. Here’s who they are. I’m filing bankruptcy. You get a discharge.
The debt still exists, but the personal obligation on the debt no longer exists. So, when they send you a letter that says, hey, you owe us money, they’re making a claim that you’re still personally liable on the debt, which is false. That’s one of the easiest claims to make.
The debt collectors should be scrubbing some databases and making sure you didn’t file bankruptcy. They should be doing that every so often. If they don’t, then they’re just asking to get sued.
Collection Agencies Are Prohibited from Contacting You While You Are in the Process of Filing for Bankruptcy
Interviewer: What if you’re in the act of bankruptcy, but haven’t gotten it discharged yet? Are they allowed to send you any correspondence or letters?
Andrew Campbell: No. They are not allowed to do anything to collect a debt. They can file something with the bankruptcy court, of course, but, no, they’re not supposed to be. The way it works is the debtor files and there’s this place in Herndon, Virginia called the bankruptcy noticing center. That center is the one that sends out the notices.
Typically, you want to give a good week for the notices to be received and another week for them to be processed. That’s why I really wouldn’t proceed against a collection agency unless the letter was dated more than maybe three weeks after the bankruptcy was filed. They should have received the notice by then, and they should have put it through their systems by then. That’s why I like to give a little bit of wide berth there.