Rapid Fire Reader Questions – Levy, Attorney, Collection, Bankruptcy

Sometimes I get reader questions that don’t have enough information for a big answer. So here are some rapid-fire questions and answers.

Q: Can a collection agency take money out of an account that is not the debtors?

A: If the debtor is not a signer on the account and the account is in the name of someone that was not part of the arrangement with the creditor, then I can’t see how they could take money out of that account or levy the account.

Q: If I’m paying my lawyer $100 a month, can he still turn me into a collection agency?

A: If you are not paying the contractual amount due each month, I can’t see why they could not assign your account to outside collections. The idea that if you pay something, the creditor can’t take action against you is a misperception.

Q: How to write a letter to a collection agency that filed a suit against you on a credit card?

A: Why? If a suit has been filed against you, you will need to respond to the lawsuit in a timely fashion, so you don’t default. It is still possible to settle the debt before the case completion. If you don’t have experience settling these kinds of debts, I would suggest you contact Damon Day for advice.

Q: Can I give back a possession to the debtor if it was included in my bankruptcy Ch 11 without negative effects to my credit?

A: Talk to your bankruptcy attorney first to ensure you are not doing anything that can cause ripple effects.

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Q: What happens when you file bankruptcy and leave a loan out and continue to pay it to the debtor?

A: The loan is technically included in the bankruptcy since all obligations are included even if you leave one out. However, you can reaffirm the debt and continue to pay. If the creditor accepted payments from you for a debt you had when you went bankrupt, it could create significant issues for the creditor.

It would help if you discussed this with your bankruptcy attorney before you do anything.

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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