Written by Charleston Bankruptcy Lawyer, Russell A. DeMott
The holy grail of the bankruptcy process is the bankruptcy discharge.
If you call your doctor and tell her you have a discharge, I don’t care where it’s coming from, it will be a bad thing. Not so in bankruptcy. The discharge is a good thing. And with the discharge comes the discharge injunction contained in section 524 of the Bankruptcy Code.
The discharge injunction says that creditors are prohibited from trying to collect debts which were discharged in bankruptcy. It’s common for creditors–especially medical billing companies for some reason–to send billing statements after the discharge has entered.
The first step in dealing with this is to notify the creditor (yet again) that the debt is discharged.
If that doesn’t work, what next?
Then we can bring what’s called an “adversary proceeding” to enforce the injunction. Put simply, we sue the creditor and ask the Bankruptcy Court to issue an order prohibiting the creditor’s collection activities. We’ll also ask the court for attorney’s fees and other sanctions, which the court will likely award if the creditor has been given notice of the discharge.
This is usually unnecessary
Most creditors follow the rules, so filing an adversary proceeding is rare. However, if you have a creditor who’s just a bully and won’t follow the law, this injunction protects you from continued harassment. It also protects you from creditors continuing to report discharged debts on your credit report, which you should make sure to check a few months after your case closes.
If you’re having problems with creditors harassing you after you case closes, notify your bankruptcy lawyer immediately. It’s important to notify the creditor prior to taking any other actions like bringing an adversary proceeding. You need proof that the creditor has been notified, and your lawyer can make sure that happens. You also may have other claims against the creditor under the Fair Debt Collection Practices Act, your state’s consumer protection statutes, and the Fair Credit Reporting Act.