You went through bankruptcy and got your discharge. Your phone should be blissfully quiet now, right? Well…usually. But occasionally, there’s a creditor that just won’t go away.
In order to handle the situation properly, you must first understand who is actually trying to collect on the debt. If it’s your original creditor, follow the steps below.
Provide the creditor who is calling you with a copy of your bankruptcy discharge order. If you can find it, also provide them a copy of the bankruptcy schedule listing the creditor.
Do this in writing, and on the phone, state the following:
- Your case number, date of filing, and the date of the discharge.
- Demand that they stop their collection efforts immediately.
Make sure you send a certified letter “return receipt requested” so that you have proof that they received it and keep copies of all correspondence.
In the Third Circuit, an omitted debt owed to a creditor in a no-asset Chapter 7 bankruptcy case is discharged. The reason is simple enough, as the omitted creditor would not have received anything even if it was properly scheduled in the debtor’s no-asset bankruptcy.
A creditor that states they are entitled to collect because they weren’t informed of the bankruptcy or weren’t listed on the schedules is simply lying. If you follow the steps above and keep records of having done so, and they continue to try to collect, they are unquestionably liable.
If you do all the things listed above, and the creditor insists on continuing collection efforts, you can contact your bankruptcy attorney to file a motion for sanctions for violating the discharge and serve it on the offending party.
Often, the creditor has sold the debt you listed in your bankruptcy at a discount to a debt buyer, without noting that it had been discharged in bankruptcy. Then the debt buyer tries to collect from you, even though you are no longer liable for the debt.
The Fair Debt Collection Practices Act (FDCPA) prohibits post-bankruptcy debt collection.
A demand for payment on a discharged debt is a false, deceptive, or misleading statement in the collection of a consumer debt, in violation of 15 U.S.C. § 1692e(2)(A) as the debt is no longer owed, due to the bankruptcy.
The FDCPA “is a strict liability statute,” meaning that a debt collector ‘need not be deliberate, reckless, or even negligent to trigger liability.’ A debt collector is liable for violating the FDCPA even without proof of an intentional violation.
Congress made its purpose clear in enacting the FDCPA: “to eliminate abusive debt collection practices by debt collectors.” Violations of the FDCPA often result in consumer damages of $1,000 along with costs and reasonable attorney fees paid by the debt collector.
Check your credit report.
After receiving these phone calls and letters in an attempt to collect a discharged debt, you should always check your credit report after the matter has been resolved. You may find that the debt buyer reported non-payment of the discharged debt to the credit reporting agencies.
Don’t put up with illegal attempts to collect discharged debts. It’s free to chat with me about your options – you can call or text me at 215.551.7109, or drop me a line.