Expert: Terry Leeders - 6/19/2008

Question
QUESTION: To make a long story short, i filed bk in dec. 07.  I was served with a summons around october 07. I moved out of state shortly after that.  I put this creditor on my schedule of unsecured debt.  I called the court to tell them i was filing bk and rescheduled the court date to jan 10th.  i did not respond to the court in writing only spoke with them on the phone.  I didn't give my bk attorney a copy of the summons since I had already put it on the schedule f.  i didn't think of a default judgement which was entered on 2/20/08.  This creditor was notified of by bk in january along with everyone else.  I fell down by not giving my attorney a copy of this summons and now this default judgement is sitting on my credit report.  this debt was discharged.  can i get this off my record since technically it was entered during the automatic stay. if so, where would i start? thank you so much for this very valuable service.

ANSWER: You would have to bring a motion in the civil case to vacate the judgment, since it was entered after your bankruptcy was filed. Unfortunately, the creditor's attorney didn't find out about the bankruptcy soon enough, otherwise they would have just had the case dismissed.  Since the court mails the notices to the creditors (often just to a PO Box) then the creditor would have to process that, then notify their attorney.  Since this chain would take some time, it is always advisable to notify the creditor's attorney directly as well once the case was filed. Absent bringing that motion, you can write a letter to the credit bureau, and they can add that to your file, but since it was a court order, it probably won't just come off.

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

QUESTION: Thank you for your thorough answer.  Can I just ask you one more question, wouldn't this count as a violation of the automatic stay.  All my creditors zeroed my credit reports in January.  They were sent a letter in Janaury and they filed the judgement on 2/20/08.  This seems to be an attempt to collect a debt after they were notified.  Also, to add to the mix, this was a business debt and our company was an LLC.  They disregarded the LLC and filed a complaint against me personally and DBA celtic sales etc. I was not a DBA but an LLC.  I was also going to add this to my defense.  Any luck there?  Do you think it is worth going for the motion to vacate, are my chances good that it will be dismissed in your opinion.  Thanks again!

Answer
Once discharged, the automatic stay no longer applies, so it would violate the discharge order if they tried to collect on the debt.  Since it was a corporate debt, they can still try to collect from the company, but not from you personally.  You should speak to your bankruptcy attorney to help defend/dismiss the suit.