Phew! You have your chapter 7 bankruptcy discharge all done. But like a ghost from your past, the demanding voice of the debt collector over the phone overshadows your financial victory.
Why on earth would a collector call you for a debt after a bankruptcy discharge in New York or a bankruptcy discharge in New Jersey let alone any other state? You would agree that the primary reason for filing for that bankruptcy is to get these annoying debt collectors off your back.
The unwarranted calls turn up as a shock after you have worked so hard to get a bankruptcy discharge. You need to find out why:
- collectors still contact you;
- how to stop it; or
- make them pay.
You don’t have to play the victim anymore. For all it is worth, it may even be your turn to bite back.
The Concept of a Bankruptcy Discharge
A bankruptcy discharge is essentially a court order that grants an injunction (legal bar) against any creditor from trying to collect a debt you owed before filing for bankruptcy. This will stop a sheriff sale, stop garnishments, stop the harasing phone calls, and allow you to sleep at night. Unlike debt settlement programs or debt consolidation bankruptcy is a low-cost permanent solution to excessive debt.
What this means is that all your creditors are forbidden by law and the federal court’s order from asking you to pay for the debts you once owed to creditors. Thus, no debt collector can lawfully demand any old debt be paid neither can they sue or threaten to sue for a discharged debt. You have a fresh start.
Attempts to Collect Discharged Debts: What it Means
While some collectors may get the information of your bankruptcy discharge early on, some creditors have not obtained such information while others are just plain lawbreakers who would do anything to intimidate you to pay.
However, any attempt by a creditor or debt collector to collect on a discharged debt is a flagrant violation of the federal laws and a disrespect of the court order. A single attempt may be regarded as an innocent, “harmless’ action but repeated attempts may amount to contempt of court and held liable in damages against you if you file a suit.
We all know what happens to people found guilty of contempt.
Much more than the contempt charge, you could earn a lot of money from the collector’s obstinacy.
How to Stop Collectors from Contacting You
- Fair Warning:
One of the easiest and simplest ways to get collectors to back off after your discharge is to write to them or send a mail.
More often than not, collectors who call to demand payment of debts after discharge are not aware of the discharge especially if they were not included in your payment schedule.
Thus, a simple letter to inform them should make them desist from further attempts. Your letter should carry the following details:
- The date and time the collector contacted you.
- The facts of your bankruptcy filing such as:
- The case number, date of filing, and date of the discharge order (You can obtain this via PACER or contact this law firm at 844-533-3367 to help you get the number).
- A warning to cease all collection attempts.
- Send through a certified mail or get an acknowledgment receipt of the letter.
A common trick by collectors is to allege that they are not bound by the court’s order since they were not aware of your bankruptcy filing or included in your payment schedule.
Don’t fall for it. All your creditors are bound to honor the court’s order.
What to do if They Persist Stop – Remedies
There are a number of actions you can take against a collector that persistently contacts you despite your first warning:
- Filing a Formal Complaint:
- The Fair Debt Collection Practices Act controls the acts and practices of debt collectors and collection agencies across the United States. It also protects consumers from overt and abusive practices from collectors.
If any collector uses abusive language or harasses you in any way, you can file a complaint at the Federal Trade Commission or at the State’s Attorney-General’s office. Be sure to attach your records of such abusive practices
- Right to Sue:
- Finally, you can file a private suit against the collector or have your bankruptcy attorney do it for you. Since the creditor has flouted the order of the court, the court will be interested in hearing your prayers.
At the end of trial, if you succeed in proving that the collector has caused you harm such as:
- Sleepless nights;
- Embarrassment in front of friends or colleagues or employers;
- And any other harm;
he may be ordered to pay damages as well as your attorney fees in the amount the court assesses.
A good tip for you is to keep accurate records of all the collector’s attempts to recover the debt after you obtained your discharge. It will be helpful in proving your case.
It is not the norm to have collectors resurrect and demand old debts post-bankruptcy discharge. However, the reality of these abnormalities can be frustrating. However, fraud does happen by giant companies and small companies alike. There is no guarantee people will not abuse the law in trying to collect on a debt.
The good news is, you can turn from the victim to the victor. Good luck!
Contact a Fair Debt Practices attorney today.
Subhan Tariq, Esq. is a federal consumer rights attorney with offices in Jamaica Estates, NY and Jersey City, NJ. Mr. Tariq grew up in
Flushing and Queens Village and is deeply committed to helping the people in the community including volunteering with many non-profit organizations which includes helping people get their credit cleared up for free after filing bankruptcy. Get your legal questions answered for free today now. Call us at 844-533-3367.