B. Grant McNutt

When you file bankruptcy, you have a right to expect relief from collection harassment. The automatic stay prevents creditors from pursuing ALL collection actions immediately upon filing, with few exceptions. The bankruptcy discharge order makes that prohibition permanent, at least as to debts that were discharged in the bankruptcy.

Unfortunately, some people who have successfully completed their bankruptcy cases still have problems with past creditors, including:

  • Continuing collection efforts by the original creditor
  • The debt still being reported as delinquent with an outstanding balance on consumer credit reports
  • Contact from debt buyers who purchased the discharged debt or a debt collector assigned by the original creditor

Sometimes, those contacts are honest mistakes. Unfortunately, that is not always the case. Debt collectors may know exactly what they are doing and are hoping to trick or pressure you into paying a discharged debt. They will attempt to collect debt in violation of the discharge order. There are even debt buyers that purchase discharged debt for pennies on the dollar, hoping to make a profit by collecting on a small percentage of that debt.

Some of the ways these collectors and debt buyers attempt to collect on discharged debt include:

  • Sending confusingly-worded collection letters that don’t actually claim that you’re still legally obligated to pay the debt, but invite you to settle for a portion of the original balance
  • Claiming that the discharge order doesn’t apply to them, because they are not the original creditor and were not included in the schedule of debts
  • Misreporting discharged debt to credit reporting agencies in hopes that you’ll pay it off as the quickest means of resolving a negative credit entry

Fortunately, the law protects you from efforts to collect discharged debt.

The Bankruptcy Discharge Order

The bankruptcy discharge order is a court order. Like any other court order, the bankruptcy discharge order has the force of law. Any creditor or debt collector who acts in violation of the order may be found to be in contempt of court, and may be sanctioned by the bankruptcy court. In extreme cases, these sanctions may include payment of damages and/or attorney’s fees to the bankruptcy petitioner.

The U.S. Bankruptcy Code makes it easy for a debtor who has received a discharge to assert his or her rights. While many violations of consumers’ financial rights require the filing of a separate lawsuit, discharge order violations can be addressed by petitioning to reopen the bankruptcy case, without a filing fee.

Other Consumer Protection Statutes

Many attempts to collect on discharged debt also violate one or more state or federal consumer financial protection statutes. For example, the Fair Debt Collection Practices Act (FDCPA) prohibits misrepresentation of the legal status of a debt. At Bond and Botes, we ask our client’s to bring us all collection letters they receive both before and after they file their bankruptcy petition. There are certain requirements about what is allowed to be contained in collection letters.

Also, the Fair Credit Reporting Act (FCRA) requires credit reporting agencies and those furnishing information to them to investigate disputed items and make deletions or corrections as necessary. These actions are more complex than pursuing sanctions for a bankruptcy discharge violation but it is an area of law that our law firm handles. In fact, if our clients’ credit reports are not fixed after a bankruptcy discharge, then we want to look at their credit reports so that we can ensure our clients are in the best financial shape possible.

It is important to note that both of these federal consumer protection statutes, the FDCPA and the FCRA, provide for statutory damages, actual damages, and attorney’s fees where there is a successful case.

Be Prepared to Protect Yourself

It would be nice to assume that once your debts are discharged, you would never hear from one of those old creditors again. Unfortunately, that’s not always the case. The Consumer Financial Protection Bureau (CFPB) complaint database includes more than 8,000 reports from consumers regarding attempts to collect debt they say was discharged in bankruptcy. Thus, it is important that you anticipate and prepare for this possibility by:

  • Asking your attorney what you should do if you receive collection calls after bankruptcy and letting your attorney know about the collection contact as soon as you get it
  • Keeping a copy of your discharge order readily available so you can provide information or a copy to creditors or collectors
  • Monitoring your credit report after bankruptcy and promptly disputing any discharged items that continue to appear (or reappear) with a balance

We want to know immediately if our clients are being contacted to pay a debt after a bankruptcy discharge or if they are receiving harassing phone calls or letters from creditors or debt collectors on debts that were listed in the bankruptcy. If you find yourself in this situation, please reach out to us to see if we can help you. Once our client’s cases are discharged and over, we don’t leave them.

If you haven’t filed bankruptcy yet and are needing to know information about your options, give us a call and we can answer all your questions regarding Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, stopping a foreclosure or wage garnishment, avoiding liens, stopping lawsuits, discharging medical debt, personal loans, payday loans, credit card debt, etc. We can alleviate your stress! We want to help and we can help you!


Alabama State Bar requires the following: “No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.”


Bond, Botes, Sykstus, Tanner & McNutt, P.C.

Web: www.bondnbotes.com

Facebook: facebook.com/Bond-Botes-Sykstus-Tanner-McNutt-PC-203986783117475/

102 South Court St, Suite 314, Florence, AL 35630

Phone: 256-760-1010 • Fax: 256-760-1023

Office Hours: Monday – Friday • 8am to 5pm

No representation is made that the quality of legal services to be performed is greater than the quality of legal services to be performed by other lawyers.