Dealing with bankruptcy discharge violations effectively requires understanding your rights and the appropriate steps to enforce them. A discharge in bankruptcy legally eliminates the debtor’s obligation to pay off certain debts, prohibiting creditors from taking any collection actions on those discharged debts. If a creditor attempts to collect on a discharged debt, it’s considered a discharge violation. Here’s the best way to deal with such violations:
1. Understand Your Discharge Order
First, ensure you fully understand which debts were discharged in your bankruptcy. Not all debts are dischargeable, and the specifics can vary between Chapter 7 and Chapter 13 bankruptcies. Review your discharge order, which lists the debts that have been wiped out.
2. Keep Detailed Records
If you suspect a discharge violation, start by keeping detailed records of all communications from creditors or collection agencies. This includes saving any letters, emails, or records of phone calls related to the attempted collection of the discharged debt.
3. Notify the Creditor of the Discharge
Often, a discharge violation occurs because of a mistake or oversight. The creditor may not be aware that the debt was discharged. The first step is to inform the creditor of the discharge by providing them with a copy of the discharge order and the case number. This communication should be done in writing, and you should keep a copy for your records.
4. Consult with Your Bankruptcy Attorney
If the creditor continues to pursue the discharged debt after being notified, it’s time to consult with your bankruptcy attorney. Your attorney can advise you on the best course of action, which may include sending a formal cease and desist letter to the creditor or taking legal action.
5. File a Motion with the Bankruptcy Court
If notifying the creditor doesn’t stop the collection attempts, your attorney may recommend filing a motion with the bankruptcy court. This motion seeks to reopen your bankruptcy case to address the discharge violation. The court can then order the creditor to stop all collection activities and possibly sanction the creditor for violating the discharge order.
6. Seek Damages if Appropriate
In some cases, you may be entitled to seek damages from the creditor for the discharge violation. This can include compensation for any financial loss, emotional distress, and attorney’s fees incurred due to the violation. The bankruptcy court will determine the appropriateness and amount of any damages.
Example Scenario:
John Doe received a discharge of his debts under Chapter 7 bankruptcy, including a significant credit card debt. Several months after the discharge, the credit card company began calling John, demanding payment for the discharged debt. John first informed the creditor of the discharge by sending a copy of the discharge order. Despite this, the calls continued. John then consulted with his bankruptcy attorney, who sent a cease and desist letter to the creditor. When the collection attempts didn’t stop, John’s attorney filed a motion with the bankruptcy court, which resulted in the court sanctioning the creditor and awarding John damages for the violation.
Dealing with bankruptcy discharge violations involves a clear understanding of your rights, meticulous record-keeping, and prompt action to notify creditors of the discharge. If violations persist, legal action through the bankruptcy court can enforce your rights and provide relief from wrongful collection attempts. Consulting with a knowledgeable bankruptcy attorney is crucial to navigating this process effectively.
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