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Can You Be Sued While In An Active Chapter 13?

Discuss the legalities of Bankruptcy Law

Can You Be Sued While In An Active Chapter 13?

Postby Arlis » Tue Nov 22, 2016 8:13 pm

Mr. Markus,

Thank you in advance for reading my question.

I live in California and my husband and I filed a Chapter 13 in April 2006. In late 2006 or early 2007, as I do not remember, I opened up a checking account in my name only.

I wrote 3 checks, that were all paid by the bank. long story short, the checks overdrewn my account. I made a couple of deposits to offset the overdrawn accout, but it did not help in taking of the outstanding balance. I did not read the fineprint and realized that this bank not only charged me NSF fees, but they were adding on 6.00 a day for the being overdrawn!! I called the bank and asked them to close my account, they would not, until the fees were paid. Well I couldnt afford to pay them, and I figured eventually they would close the account, which they did.

When the account was closed, I received a letter stating so and how much I now owed this bank which was 1170.76!! I wrote them a letter stating my finacial situation and that I cannot pay this amount to them and that I had previously asked them to close my account so it would keep assesing me fees. Now they have this account turned over to a debt recovery company and they are demanding the payment in full. They said they cannot except payment arrangements of 30.00 per month which is what I said I would do, but that they wanted the account to be paid in full.

They stated that they would pursue legal action now, and that since this "debt" was not listed in the chapter 13 that they can pursue legal aganist me.

Is this true? If so, what are my recourses if any.

I have a call into my attorneys office, but he takes days to return calls back, so I would like to know ASAP, as this has me concerned and I need to know what I need to do.

Thank you again.

ANSWER: Yes, this is true.  The debt you owe to the bank is a post petition debt in your chapter 13 bankruptcy case.  This means that it is not part of the bankruptcy plan and you need to pay 100% of the debt.  You may be able to seek a modification of your current chapter 13 plan payments(have them lowered) so that you can afford to make payments on the new debt, but that is a very risky proposition because, at least in the Central District of California, you are not allowed to incur new debt without court approval.  However, there may be other reasons for you to seek to lower your plan payments(increased expenses; lowered income) and that might enable you to free up some money to deal with this.  This is a bit more complicated than this service can properly addresss, so you definitely need to consult with your lawyer about this.

---------- FOLLOW-UP ----------

NSF check fees are considered a debt?Even though I asked the bank to close this account before it got to this?

Couldn't I have my attorney petition the Trustee and request that this debt be added since the bank did not want to close this account? And so basically they can garnish my wages or levy my bank account is what your telling me?
Arlis
 
Posts: 47
Joined: Sat Jan 04, 2014 2:32 am

Can You Be Sued While In An Active Chapter 13?

Postby Ainmire » Sun Nov 27, 2016 10:35 pm

You seem upset at my answer.  For that I apologize.  Anything you owe to someone is a debt.  If you don't think you owe the debt, then you need to challenge it pursuant to regular legal avenues.

As far as the Chapter 13 case goes, the automatic stay will prevent them from collecting against that debt until your case is completed UNLESS there is a provision in your Plan which revests the assets of the estate to you upon confirmation of the plan(here in the Central District of California the property revests only after completion of the plan payments).   

However, ultimately you are going to have to either pay this debt, or challenge that you owe it, which you would do by defending whatever lawsuit they eventually bring.  It is possible that they could bring the lawsuit during your Chapter 13 case, but as I said, they can't seek to collect from you until after your bankruptcy case is completed(unless the property has revested, as stated above).

No, you can't add post petition debt to your pre-petition plan payments.
Ainmire
 
Posts: 39
Joined: Tue Dec 31, 2013 7:46 pm

Can You Be Sued While In An Active Chapter 13?

Postby Drystan » Wed Nov 30, 2016 10:09 am

Mr. Markus,

Thank you in advance for reading my question.

I live in California and my husband and I filed a Chapter 13 in April 2006. In late 2006 or early 2007, as I do not remember, I opened up a checking account in my name only.

I wrote 3 checks, that were all paid by the bank. long story short, the checks overdrewn my account. I made a couple of deposits to offset the overdrawn accout, but it did not help in taking of the outstanding balance. I did not read the fineprint and realized that this bank not only charged me NSF fees, but they were adding on 6.00 a day for the being overdrawn!! I called the bank and asked them to close my account, they would not, until the fees were paid. Well I couldnt afford to pay them, and I figured eventually they would close the account, which they did.

When the account was closed, I received a letter stating so and how much I now owed this bank which was 1170.76!! I wrote them a letter stating my finacial situation and that I cannot pay this amount to them and that I had previously asked them to close my account so it would keep assesing me fees. Now they have this account turned over to a debt recovery company and they are demanding the payment in full. They said they cannot except payment arrangements of 30.00 per month which is what I said I would do, but that they wanted the account to be paid in full.

They stated that they would pursue legal action now, and that since this "debt" was not listed in the chapter 13 that they can pursue legal aganist me.

Is this true? If so, what are my recourses if any.

I have a call into my attorneys office, but he takes days to return calls back, so I would like to know ASAP, as this has me concerned and I need to know what I need to do.

Thank you again.

ANSWER: Yes, this is true.  The debt you owe to the bank is a post petition debt in your chapter 13 bankruptcy case.  This means that it is not part of the bankruptcy plan and you need to pay 100% of the debt.  You may be able to seek a modification of your current chapter 13 plan payments(have them lowered) so that you can afford to make payments on the new debt, but that is a very risky proposition because, at least in the Central District of California, you are not allowed to incur new debt without court approval.  However, there may be other reasons for you to seek to lower your plan payments(increased expenses; lowered income) and that might enable you to free up some money to deal with this.  This is a bit more complicated than this service can properly addresss, so you definitely need to consult with your lawyer about this.

---------- FOLLOW-UP ----------

NSF check fees are considered a debt?Even though I asked the bank to close this account before it got to this?

Couldn't I have my attorney petition the Trustee and request that this debt be added since the bank did not want to close this account? And so basically they can garnish my wages or levy my bank account is what your telling me?
Drystan
 
Posts: 41
Joined: Sat Feb 15, 2014 4:20 pm


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