Life after Bankruptcy: Dealing with the Creditor Who Just Won’t Go Away


One of the biggest perks that comes with filing bankruptcy, if there are perks, is that from the moment you file your bankruptcy case your creditors can no longer contact you.  This means the phone calls stop!  And this continues throughout the entirety of your bankruptcy case.  Then, once the bankruptcy court has reviewed your case and determined you have jumped through all the necessary hoops it will grant you a discharge of your debts.

The Discharge Order granted to you by your bankruptcy judge acts a shield against all future collection efforts by those creditors who were a part of your bankruptcy.  Despite this, periodically I will have a client call me and inform me that they have a creditor is still trying to collect on the debt that was discharged in the bankruptcy.  Creditors will sometimes take the bold action of openly trying to collect on discharged debts through the normal collection processes such as garnishment or demand letters.

And sometimes they are much more sneaky – either way, by continuing to try and collect on a debt that the bankruptcy court has discharged deprives you of the fresh start you were seeking through the bankruptcy process.

Recently I had a debt buyer take the bold move of garnishing my client’s wages about a month after the debt was discharged.  Sometimes when creditors do this they will claim that they didn’t have notice that the bankruptcy case had been filed.  This was not that case in this situation. We had written proof that the debt buyer had notice from me and from the court on at least three occasions.  I wrote a letter to this creditor on behalf of my client, outlined how they clearly knew of the case, violated the discharge order of the court, and that my client would take a cash settlement from them, including paying my attorney’s fees, if they wanted to avoid having us bring this up in the bankruptcy court.

I received a check for the full amount requested in three days (maybe I should have asked for more?!).

Many times creditors violate the discharge order in more subtle ways.  I routinely work with my clients to pull a copy of their credit report about 60 days after their bankruptcy is discharged.  Once the bankruptcy case is over your creditors are required to update the information on your creditor report.  All debts discharged in your bankruptcy should show that there is $0.00 owed and that the debt was discharged in bankruptcy.  Often creditors will fail to do this.

Your credit report will show a balance owing and not mention the bankruptcy discharge.  This keeps your credit score down and slows your recovery and fresh start.  When I see this on your credit report I work with you in getting the credit to fix it and make the report accurate or face sanctions through the court.

Most creditors adhere to the bankruptcy discharge, but when they don’t, there are options available and even the possibility of having damages awarded.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© John Skiba, Arizona Consumer Law Group, PLC | Attorney Advertising

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