Can creditors file a bankruptcy claim if they charged off the account & sold to a collection agency?

[Packerfan]

I filed 2 weeks ago for a Chapter 13 100% payout plan.   I still haven't had my 341 meeting but I was two questions came to mind today about the 2 accounts that were charged off and sold to a collection agency.   

Who gets to file the claim, the original creditor or the collection agency that purchased that account?    I was worried that both could file or that the original creditor could so that they would get paid 100% thru plan plus what the collection agency paid for the account.  

Also, my auto loans were 3.8% and 0.9% but my paperwork that I signed with my attorney stated 6.5% on those???    So, the auto lenders will make even more money than original contract states.   My attorney is out on vacation until next Tuesday and his paralegal told me earlier today that yes the auto lenders do make more money in a ch 13 plan because the rate is higher.   

Any by input would be greatly appreciated.   

[Taoron]

Here's some information, and I think it would help you. If your original loan/credit card debt/ etc was sold, the original creditor is no longer the owner of the account.  If it just hired a third party to do debt collection, then it was done in a way where that company just did the heavy work like calling you, sending you letters, etc. (The bank/institution with loan is still the original creditor.)   Hope this helps!

Third-party debt collection agencies are hired to collect debt on behalf of another entity, like a creditor.

Debt buyers pay creditors for debt portfolios, giving the debt buyer ownership of the account(s). The debt buyer may then act as a debt collection agency and attempt to collect. On the other hand, it may use a third-party debt collector to collect on its behalf, or it may just sell the debt again to another debt buyer.

*Many creditors choose to use a third-party debt collection agency because they do not have an adequate infrastructure to collect on their own.

From a creditor’s perspective, here are the pros and cons of each system:

Using debt collection agencies:

Pros

• Allows for greater control and supervision of the collection process
• Working with debt collection agencies can protect the reputation of the creditor, if the collection agency is abiding by the law and treating consumers fairly.

Cons

• Collection can be a long and drawn out process, delaying when the creditor can receive its money.

Using debt buyers:

Pros

• Using a debt buyer allows for a quick sale of the debt, which brings an immediate and guaranteed amount of money to the creditor.
• Can save on some costs associated with third-party debt collection

Cons

• Less control and supervision over the process
• Potential reputational harm if there is a long cycle of reselling the debt

Source: http://www.clearpointcreditcounselingsolutions.org/resource-center/articles-and-tips/dealing-with-de...

[ezdriver]

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@Packerfan wrote:

I filed 2 weeks ago for a Chapter 13 100% payout plan.   I still haven't had my 341 meeting but I was two questions came to mind today about the 2 accounts that were charged off and sold to a collection agency.   

Who gets to file the claim, the original creditor or the collection agency that purchased that account?    I was worried that both could file or that the original creditor could so that they would get paid 100% thru plan plus what the collection agency paid for the account.  

Also, my auto loans were 3.8% and 0.9% but my paperwork that I signed with my attorney stated 6.5% on those???    So, the auto lenders will make even more money than original contract states.   My attorney is out on vacation until next Tuesday and his paralegal told me earlier today that yes the auto lenders do make more money in a ch 13 plan because the rate is higher.   

Any by input would be greatly appreciated.   

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Yours are valid questions to ask during your 341 meeting ... or before to your attorney.

How do you know that the debt was sold to the original creditor? Your credit report would show the current owner of the debt unless you have received written communication from an entity other than the original creditor. Your attorney has the responsibility to ensure that the approriate creditor is listed on your creditor schedule.

Regarding those auto loans, I find that paralegal's statement to be odd. I would question your attorney and certainly bring it up in the 341 meeting if you have not had a good answer by that time. It makes no sense that the auto loan creditors would earn more than was originally contract for ... no more than 100% of what they would have earned had you not file the ch13.