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No Notice May Be Good News

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Question: 
One year ago one of your customers disappeared leaving a large balance due on an unsecured loan. Yesterday you saw him in a local café and asked him about his debt. He laughed and said he had moved out of state and after the waiting period had run filed bankruptcy. He got his discharge last week and was moving back home. You never received notice of the bankruptcy, is the discharge effective against your loan?
Answer: 

If the debtor failed to list or schedule your debt on his bankruptcy forms and you had no notice or actual knowledge of the bankruptcy, the debt was not discharged in the out of state bankruptcy proceeding. Request a copy of his bankruptcy petition or the case number and the court location. You can contact the clerk of the applicable bankruptcy court and request copies of the records. If the debt was not scheduled and you had no notice, you can still collect the debt.

First published on BankersOnline.com 1/15/01

First published on 01/15/2001

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