Dealing Creditors After Bankruptcy Discharge
The reason that you are having trouble finding good information about ways to voluntarily repay creditors after bankruptcy is because it is extremely rare for a consumer who has filed for bankruptcy protection and received a discharge to pay discharged debts voluntarily. However, there are some like you who feel morally obligated to repay their debts even though they are legally no longer required to do so. In such cases, the law does not prohibit you from making payments to creditors voluntarily after bankruptcy; rather, it limits the creditors’ ability to use the legal system to enforce the payment of a delinquent debt.
While still in bankruptcy, a debtor can negotiate with certain lenders to continue paying his accounts, if the lender will agree to honor the terms of the previous credit agreement. This type of agreement, called a “reaffirmation agreement,” is typically used by borrowers who wish to keep the property securing a loan, such as a vehicle or house; it is rare for a petitioner to seek a reaffirmation agreement on an unsecured debt such as a credit card. All reaffirmation agreements must be approved by the bankruptcy court; once the court has approved the agreement, the debtors is responsible for the agreed upon payments after the bankruptcy discharge. If a debtor fails to make payments as agreed under a reaffirmation agreement, the creditor can attempt to collect the debt like any other debt. If the debt is secured, the creditor can proceed to repossess any property securing the loan. However, in your case you did not seek to reaffirm the debts you now wish to repay, so you have no legal obligation to repay these debts. If you choose to make payments to your creditors voluntarily, the creditors will likely accept your money, but your payments should not reactivate the debt or nullify the discharge you received from the bankruptcy court. If you want to begin making payments on these debts, I would encourage you to first consult with your attorney to make sure that making payments will not lead to any problems in the future, though I do not expect that problems would arise. In addition, I would make sure that the debts you wish to repay were included in your schedule of debts to be discharged when you filed your bankruptcy petition, so that there is no doubt as to whether or not these debts were discharged by your bankruptcy case.
Since many of your debts have been purchased, you may wish to rethink your feeling a moral obligation to pay back your discharged debts. In most cases, companies which purchase old debt portfolios, especially debts which are outside the statute of limitations or which have been discharged in bankruptcy, pay next to nothing for the accounts, sometimes less than one cent on the dollar. This means that if you owed the $1,000 on your original debt, the purchaser may have paid as little as $10, or even less, for the right to try to collect the debt. Since these new creditors have almost certainly paid much less for the accounts than you owed to the original creditors, you may need to reconsider how obligated you feel to pay these creditors. While I know that many people feel that they should pay their creditors what they can, it is not as if these creditors handed you cash which they are now not receiving because you have filed for bankruptcy protection. Another issue to consider is that many consumers have repaid the principal on their debts several times over due to the high interest rates charged on credit cards and other unsecured debts. Before you decide to pay these old debts, I would encourage you to look at what you actually charged on the accounts and compare the principal to the total payments you made over the life of the debts.
For more information for consumers struggling to repay their debts, I invite you to visit the Bills.com debt help page at http://www.bills.com/debt-help/. I also encourage you to read the Bills.com budget guide, at http://www.bills.com/guide/, for help in finding ways to save money and cut your expenses.
I wish you the best of luck in your financial future, and hope that the information I have provided helps you Find. Learn. Save.
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Tags: After, Bankruptcy, Bankruptcy Court, Bankruptcy Discharge, Bankruptcy Protection, Borrowers, Credit Card, Creditor, Creditors, Dealing, Debtor, Debtors, Debts, Delinquent Debt, Discharge, Legal Obligation, Lenders, Money, Petitioner, Reaffirmation Agreement, Reaffirmation Agreements, Reason, Unsecured Debt