I wasn't aware someone was a creditor when BK filed. Can they collect after discharge

[RogelioM]

I purchased auto insurance in Arizona in 1993. I signed a promissory note at that time to finance the policy. The insurer cancelled the policy two weeks later due to my driving record. I did not hear from the finance company at that time, and assumed that since no insurance was provided, I wasn't further obligated for the debt.

I filed Chapter 7 bankruptcy in 1995. I did not list the finance company on my petition, as I wasn't aware the debt still existed. My bankruptcy was discharged.

In 1996, following my discharge, I was contacted by the finance company, and after much discussion, I agreed to pay a $15 cancellation fee. They were attempting to collect about $50 in fees and charges for "missed or late payments." (The contract didn't say what would happen to the debt if the policy was cancelled, only what would happen if I didn't pay. I hadn't paid because the insurer told me they had cancelled the policy.) I wrote on the check that "cashing this check satisfies in full account #..." The check was cashed.

I am in the process of obtaining a remodelling loan and noticed that this debt is now on my credit report. It is being reported as a $250 debt. I wrote to the company, but they said that since they weren't listed on the bankruptcy, they can still collect. They said that with interest, the debt is now $250, and is being correctly reported.

Can they still collect on this? I would've listed them in the bankruptcy had I known they were out there. I lived at the same address for 5 years, so they shouldn't have had any trouble finding me to tell me they thought I owed this. I see elsewhere on the site that there's a six year statute of limitations in Arizona for written contracts. The finance company's an Arizona company, I'm an Arizona resident, and my bankruptcy was filed in Phoenix, Arizona.

Suggestions?

 

[loku]

I believe that since you did not list them in your bankruptcy, their debt was not discharged.

As for the statute of limitations, in most states, the statute of limitations on an open account of multiple items begins to run on the day of the last item in the account. I think that item was your $15.00 payment and that writing on the check that it is in consideration of all liability, etc. is not effective unless you wrote it right under the endorsement, and then only in certain states. However, the statute might have started running at the time of your last purchase on the account.

As for the amount they say you owe: if they are correct, perhaps you can negotiate with them.

You could also protest this with the credit reporting agencies, claiming the statute of limitations. Maybe they will buy it.