Creditors should double check the bankruptcy status of a debtor/borrower before pursuing collection. As a pending case illustrates, pursuing collection of an initially reaffirmed, but later discharged mortgage could be a violation of the Fair Credit Reporting Act ("FCRA") and Fair Debt Collection Practices Act ("FDCPA"), even when a debtor takes post-bankruptcy action related to the debt, such as making payments, seeking a modification of the loan or short sale of the property.

The facts at issue are not uncommon in the mortgage industry. In 2005, a borrower obtained a first and second mortgage. The borrower then filed for Chapter 7 bankruptcy protection in 2008. In the bankruptcy, the debtor filed a Statement of Intention to retain the collateral, but later failed to enter into formal reaffirmation agreements. The mortgage debts were subsequently discharged. After obtaining a discharge, the debtor remained in the property and sought a post-bankruptcy loan modification and then a short sale. Both were unsuccessful. During the modification/short sale process, the debtor's second mortgage loan was transferred to a new loan servicing company. After learning of the transfer, the debtor called the new loan servicing company to notify it of the bankruptcy discharge. The debtor also requested not to receive further collection calls and was placed on a "do not call" list. Shortly thereafter, the property was sold at foreclosure in October 2010.