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My chapter 13 bankrutpcy was dismissed. How does this impact credit card debt?

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Dear Michael, I have not paid my cc since 12/2012. Unfortunately I hired a crook of an attorney who said he could file a chapter 11 to save my house and refinance from $240,000 to $114,000. I did not realize it but he was not able to file a chapter 11 and he filed a chapter 13 without telling me. He charged me $17,000. I went to court to disgorge his fees. I lost but the Judge dismissed the bankruptcy in March 2013. I owed about $48,000 in credit card debt. So far I was contacted by Capitol Appreciation saying I owed a Discover card debt of $5,000. I sent a debt validation letter and they did not answer. I just received a letter from Portfolio Recovery Associates who bought the debt from Pier One. Should I send a debt validation? My question is how likely will all the creditors come after me after the fact the bankruptcy chapter 13 was filed May 2012 and dismissed March 2013. December of 2016 will be 4 years the statue of limitations for the credit collection to take me to court. The bankruptcy was filed in May 2012, but no payments were made no plan was filed. The Judge dismissed the bankruptcy March 2013 and did order the attorney pay me back $3,000 only. So my question is would it be wise to send validation letters to any collection companies and see what happens? Could your counselors help me figure out a plan. No payments were made to the credit card companies since 2012, so... will 2016 be the four year statue of limitations? Thank you so much for any advice on this situation .

Your chapter 13 bankruptcy filing will often create a stay on collection activity. It can take time from the date you file, to the date a workable repayment plan can be established and started. Even though your plan never got underway, that gap of time between filing and your chapter 13 being dismissed, can put a pause on the SOL time for your credit card bills. This stay on collections and the SOL is often referred to as tolling.

Your accounts may have tolled for 10 months. That would mean adding roughly a year to the SOL for a debt collector to legitimately sue you. You can run this by an experienced bankruptcy or debt defense attorney and double check.

Bankruptcy dismissed, credit card debt collectors come knocking.

I have seen chapter 13 dismissals that seemed to have created a void for credit card debts to fall into. People may never hear from their creditors or debt collectors again. The last file I worked like this was about a year ago and involved more than a dozen credit cards between the husband and wife. Their bankruptcy dismissal had been 2 years prior, and not a peep was heard about all but one account.

I also see bankruptcy dismissals that show debt collectors are paying attention. And that appears to be the case with you, as evidenced by the two debt collectors you have heard from on the Discover and Pier One accounts.

Portfolio Recovery Associates (PRA or PRG) is highly litigious with the debts they buy. You could send a debt validation request if you like. The threshold of information they need to respond with is so low it can be tripped over. If there is any difficulty with them getting the media they need, they may not bother pursuing the debt. But they may also take a close look at how collectable you seem, and become more likely to sue.

Discover does not sell debts currently. And Discover can also be aggressive with collections in the courts. The debt collector you wrote that validation letter to may end up responding to you once they get anything needed from Discover, or Discover may yank the account and place it with an attorney in your state in order to collect, including through the courts if necessary.

Was your debt validation request letter a long one where you ask for a whole bunch of things, or short and to the point?

Then again… they both may just not pursue your accounts that hard. Not all collection accounts are targeted for aggressive collections. Not by a long shot. You can put up a good defense if Portfolio Recovery does sue. Discover would be another matter. You can negotiate settlements if either or both go that route, or you could be more proactive and try to settle with them now. I often find settlements prior to attorney placement to offer a better savings.

There is help available. But before we go there, I have a few questions.

What state are you in? What are your goals for resolving these accounts? Are there other unsecured debts besides the two we are talking about?

Post your answers in the comment section below and lets go from there.

Anyone reading that has questions or concerns about dealing with debt collectors after your bankruptcy was dismissed is welcome to post below for feedback.


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