The key to a great outcome in bankruptcy is documentation. Documentation is key whether the debt is related to a credit card account, student loan, auto loan or a mortgage. Have you ever tried to dispute a debt? You know you made the payments but the creditor continues to argue that you did not. The creditor’s general reply is; “prove it.”
Documentation is the key to that proof. The absence of proof from you that a payment has been made may actually become proof against you that a payment was not made. So what type of documentation are we talking about?
Documentation may include cancelled checks, titles, deeds of trusts and mortgage statements? All of it can provide crucial information. For example, let’s say that you cannot find the cancelled check for a payment you made in August 2009 and the mortgage company claims that you did not make that payment. What is another way that you can prove that payment has been made?
If you kept all your mortgage statements you would be able to use those statements to review the account. In those statements you just might find proof that the payment was made. It is not uncommon for the mortgage company to file a proof of claim at the beginning of a Chapter 13 stating that some type of fee or late charge is due and owing even though the debtor believes they are current. If this happens the next step is to provide the debt documentation to your attorney so the objection to the proof of claim may be prepared.
In addition to mortgage statements, credit reports and letters from the mortgage company should be gathered and reviewed. If the numbers from the documentation do not match the numbers in the proof of claim then this will be further evidence in the objection. Deeds of trusts or mortgages are also crucial documentation that should be gathered and reviewed. This documentation will show what debt is secured by your real property. Although rare, occasionally a debtor will not remember that they pledged their real property as collateral on a debt. Without knowledge of the liens against your property you cannot adequately prepare to protect your assets in bankruptcy.
Although mortgages are the largest area where documentation is used to dispute the debt, student loans are quickly gaining speed. Regardless if the debt is a student loan or mortgage the creditor must report the correct debt and amount to the bankruptcy court. If they fail to do so, you can object to the claim. If you have a student loan and are considering bankruptcy, look for the original signed paperwork for your loans. Do you have old credit reports that list the debt? Gather those as well. Monthly statements need to be saved and you should compare those to the online amounts of the student loan creditor. If you currently do not have online access to your student loan account, sign up. Do you have evidence of the payments that you made on those loans? You guessed it, gather those as well.
This documentation will allow your attorney to verify the amount that you actually owe on the debt. Recently in Hann vs. Educational Credit Management Corp. BAP No. NH 11-084 the debtor was able to present evidence that the $55,000 debt alleged in the proof of claim was wrong. The Order issued in the objection protects the debtor from any future collection efforts by Educational Credit Management Corp.
Remember that knowledge is power. The knowledge you gain by gathering and reviewing your documentation the power you will have to obtain a successful bankruptcy discharge as well as paying only the amount you truly owe.
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Last modified: January 7, 2013