A bankruptcy discharge eliminates your obligations to pay debts included in your bankruptcy filing. If you listed it and you received a discharge, then you are no longer responsible or liable for that debt. Most people think that that means no more telephone calls, dunning letters, or lawsuits from people trying to collect on that debt. For the most part, that is usually the case; however, there are many creditors and third-party debt buyers who choose to ignore this basic tenet of bankruptcy law.
Why Do Collectors Continue to Call?
Some may honestly not know that either you went through bankruptcy or what it means to have a debt discharged. These creditors, a simple telephone call or letter from you or your attorney will usually stop their collection activity. If the action of one of these creditors is relatively minor, for example, a telephone call or letter seeking payment of the debt and they immediately stop their collection efforts when informed of the bankruptcy, then as they say in the sporting universe, “no harm, no foul.”
For others, it is not as simple. There are some creditors who may take your bankruptcy personally and persist in trying to collect on a discharged debt. Worse than these, are the debt buyers who know they are breaking the law and figure that most people will not attempt to put up a fight against them. They purchase old and/or discharged debt for pennies on the dollar and if only a portion of the people they contact pay them, they will make a profit. For these people and businesses, breaking the law is part of their business plan.
Creditors Ignoring the Discharge Order
When a creditor or debt collector persistently tries to collect on a debt that was discharge in bankruptcy, that creditor is violated federal law. The bankruptcy discharge violation states that a discharge, operates as an injunction, which is a legal term that means no one can act against a person regarding a discharged debt. If this is done, it means that they are violating a federal judge’s order.
Fortunately, there are state and federal laws that protect people from receiving collection attempts on debts that were included and released in a bankruptcy action. These collection attempts on discharged debts can be violations of the federal Fair Debt Collection Practices Act (FDCPA), the North Carolina Debt Collection Act (NCDCA) or the North Carolina Collection Agency Act (NCCAA).
The FDCP, NCDCA and NCCAA all allow for an award of statutory damages, actual damages, and attorneys’ fees. These consumer protection statues generally allows our firm to represent consumers on a contingency basis, meaning you do not have to pay any money unless we recovers money on your behalf.
Representation for Post-Bankruptcy Collection Attempts
If you or a loved one have fallen victim to any abusive collections practices by a mortgage company (or other creditor) following a bankruptcy discharge or completed plan, especially in cases where the creditor’s actions have directly contravened rulings made by the bankruptcy judge in charge of your case or the indications of a trustee, you have a case to sue for damages.
Speak to an attorney at Maginnis Howard today. Our attorneys have vast experience in protecting the rights of our clients against abusive and unlawful collection practices, and will perform a case review free of any charge or obligation for you, in order to determine the best way to assist you in rebuilding your finances and getting back on your feet.