What can I do if creditors are trying to collect debt that was already discharged?

When you enter into a Chapter 7 bankruptcy, your debts are discharged after the sale of your non-exempt assets and the distribution of money in the bankruptcy estate to the creditors. In a Chapter 13 bankruptcy, on the other hand, your debts are discharged after you complete the three-to-five year repayment plan that is generally required in such cases. Either way, after your debts have been discharged or forgiven, those debts are not collectible and creditors are not permitted to take any action regarding those debts. If your creditors are trying to collect a debt that has been discharged in bankruptcy, you have several options for stopping the activity.

Deterring Creditors & Collectors

There are a few different protections in place that preclude a creditor from successfully recovering a discharged debt. If a creditor attempts collection efforts on a discharged debt, you can file an action with the court reporting the collection activity, and ask that the case be reopened to address the matter.

The bankruptcy court will often do so to ensure that the discharge is not violated. Under the bankruptcy code, a discharge issued in bankruptcy constitutes a permanent statutory injunction prohibiting creditors from taking any action to collect the forgiven debt, including the filing of a lawsuit. A violation by the creditor is a form of civil contempt, which is often punishable by a fine. The collector of the debt (although not the creditor itself) may also be in violation of the Fair Debt Collection Practices Act (FDCPA) for his collections activity.

Reporting Abusive Collectors

You can report abuses of the FDCPA to your state’s attorney general or the Federal Trade Commission. They may begin an investigation and take action against the collector who is engaging in illegal practices. You may also be able to file a private lawsuit for a violation of your state’s debt collection laws or a deceptive trade practices claim. 

If you file such a civil suit, you may be entitled to various monetary damages as a result of the collectors' actions against you. The damages you are entitled to will vary based on the type of harm caused by the creditor/collector. In any event, if you are facing collections activity for discharged debt, you need to get help. An attorney in your jurisdiction can advise you of the additional remedies available in your state and can help you to put a stop to the harassment once and for all.