What to do if a creditor is trying to collect after discharge

The option to file bankruptcy is there for people who see no other logical solution to their financial woes. Filing for bankruptcy is never an easy task; even when the process is over, problems can still arise. One such complication is when creditors continue to come after you even after discharge.

What is Discharge in Bankruptcy?

A bankruptcy discharge is a court order which relieves the debtor from paying certain debts that were made before the bankruptcy was filed. It also prevents creditors from filing debt-related lawsuits against the debtor. Moreover, the creditor cannot attempt to collect the debts discharged in bankruptcy. This permanent order gives a bit of reassurance to the debtor, as some of the debts that they’ve acquired have been removed from their shoulders. Sometimes, though, a creditor will still call and demand they pay for a debt that was supposedly discharged.

There are cases like this all around the country, but many people don’t know how to handle it. Here’s what you need to know about creditors asking for money after discharge.

Why Does This Happen?

Oftentimes, this happens because the original creditor sold off the bad debt to a debt buyer without properly informing them that it was discharged. Thus, the buyer isn’t even aware of the discharge.

What Do You Do?

When this happens, remember to do the following:

Give the collector a copy of the discharge order

If a creditor calls to demand payment, tell them you have a “discharge in bankruptcy order.” Provide the discharge order details to the collector. You can acquire a copy of it from your bankruptcy attorney, the clerk’s office at the bankruptcy courthouse, or through the Public Access to Court Electronic Records (PACER). Send a copy of the discharge order to their office and use the Return Receipt service to get a signed confirmation that they received the document.

Remember to keep copies of ALL the documents you send.

If they still persist…

Check if you listed the debt on your bankruptcy petition

In most cases, debts not listed in your bankruptcy schedule are also discharged. However, in some cases, the creditor may have a right to repossess and sell the asset connected to the debt. Do not automatically give in. Review the facts first. Remember to keep calm and…

Talk to Your Bankruptcy Attorney

If a creditor or debt collector continues to contact you, and the debt has been discharged, they are violating the discharge injunction of the Bankruptcy Code, and their actions violate the law. Seek legal advice for help in administering the discharge order, because creditors collecting debts after a discharge in bankruptcy can be sued for damages and sanctions.

Being granted a discharge in bankruptcy is supposed to give the debtor peace of mind. Know your rights and do not be afraid to enforce them.

Add a Comment

Your email address will not be published. Required fields are marked *