The Bankruptcy Discharge and Debt Collection

One of the situations I've seen quite a bit of lately is the collection of debts that have been discharged in bankruptcy. I think there is merit in discussing what potential bankruptcy filers should know about this problem.

One of the primary reasons for filing for bankruptcy is the very strong mechanism of the discharge injunction. Once there's a discharge order, all the debts are eliminated and future collection efforts are enjoined (not allowed).

Seems simple enough, so why the article? Well, many debt collection companies and creditors are incredibly large organizations. They don't really pay attention to an individual bankruptcy filing, they perform systematic checks for debtors who are involved in a bankruptcy. Once a bankruptcy is complete, a debtor no longer appears on these lists and collection begins again.

If you think they shouldn't be allowed to do that, you'd be right. Collecting on a discharged debt is in violation of the bankruptcy discharge injunction. Also, if the collection is being done by a debt collector, then its a violation of the FDCPA too. A debtor who finds themselves in this situation would be entitled to actual and punitive damages.

If you have filed for bankruptcy, or plan to, keep this in mind. You should contact an attorney if you receive a collection letter or call after your discharge. It is not only important for you to enforce your rights, but it's also important to put a stop to a practice that shouldn't be so routine.