If you’ve had debt legally discharged in bankruptcy, you might expect that no one would then try to collect on it. Well, your expectation is wrong. Your “discharged” debt is sold and securitized. Surprise! This is another major topic at the Bankruptcy Boot Camp and Max was interviewed in an article for Business Week about it. Your discharged debt won’t die which is why it is sometimes referred to as Zombie Debt.
Naked Capitalism comments on an article from the New York Times about robo-signing debt collectors.
Without that information it is hard to imagine how any company could meet the legal standard of due diligence, particularly while churning out thousands and thousands of affidavits a week…..
That was made vividly clear during the deposition last year of Jay Mills, an employee of a subsidiary of SquareTwo Financial (then known as Collect America), a debt-buying company in Denver.
“So,” asked Dale Irwin, the plaintiff’s lawyer, using shorthand for Collect America, “if you see on the screen that the moon is made of green cheese, you trust that CACH has investigated that and has determined that in fact, the moon is made of green cheese?”
“Yes,” Mr. Mills replied.