What are your options if a creditor is trying to collect on a debt that was discharged in bankruptcy?
Check your Credit Score After your Bankruptcy Discharge.
Lately, I have spoken with several new potential clients regarding collection actions that are being taken against them following a bankruptcy discharge. This really underscores the importance of checking your credit report after you receive your bankruptcy discharge.
A debtor (the person who filed bankruptcy) receives a discharge of their unsecured debt if there are no objections to the discharge within 60 days of the section 341 Creditors Meeting. In most cases the deadline to object passes without objection and the Court issues the Discharge Order a few days after the deadline has passed. This means that the Debtor’s personal liability on the discharged debts has been eliminated by Court Order. Creditors are not allowed to attempt to collect on a debt which has been discharged by the Court.
But what happens 6 months after the Debtor has been discharged when a debt collector starts calling or sending letters or files a lawsuit. What should the debtor do?
First, the debtor needs to verify the date on which the debt being collected on was incurred. Was the debt incurred prior to the bankruptcy filing and therefore should be discharged? Or was the debt incurred after the bankruptcy was filed? In that case the debt was not discharged through the bankruptcy. Even if the debt was incurred after the bankruptcy was filed but before the bankruptcy was discharged, that debt is not discharged. The only debts that can be discharged are debts that are incurred prior to the bankruptcy filing.
Next, if the debt is a Pre-Petition debt, you should contact your bankruptcy attorney and make sure the debt was listed in your bankruptcy filing. In most instances, if a debt was left off due to an honest mistake, that debt is still discharged. However, that creditor does have some rights and protections related to not receiving an initial notice. If the Creditor was not originally listed the debtor can ask his bankruptcy attorney to send a Notice of Bankruptcy filing and a cease-and-desist letter. Most offices will charge a small fee for sending out this notice. If your attorney can’t or won’t send the notice, you can always hire a different attorney and ask them to send the cease-and-desist letter.
If the debt is a pre-petition debt that was listed in your bankruptcy schedules and the creditor continues to try and collect, then it may be time to hire an attorney. The creditor is most likely violating the Discharge Order from the bankruptcy Court and is also most likely violating the Texas Fair Credit Reporting Act. Your attorney will take specific steps to preserve your rights and get a fair settlement for damages. These cases are handled on a contingency fee basis.
My office, Wegner Law, is working with James Foley, an experienced consumer law attorney, to review and prosecute these cases where appropriate. If you are in this situation of a debt collector trying to collect on a debt that has been discharged, please contact me right away. Even if you used a different bankruptcy attorney for your case, I can still help you. I offer a free consultation. Please schedule your Free Consultation here or call my office at 817-494-3344.
Thanks!!
Matthew
