Debts that won't die

Despite the legal protection of the bankruptcy discharge, it is unfortunately common that debts legally unenforceable reappear in the lives of debtors.

Usually this is the result of the original creditor selling off its bad debt, without bothering to note that the debt was discharged in a bankruptcy. The debt buyer attempts to collect, frequently without any real knowledge that collection action on discharged debts violates the discharge injunction. More on zombie debt.

What to do

The first thing to do is pull out the discharge order and provide the collector making the demand with a copy, including if possible a copy of the schedules showing that the original creditor was listing in the bankruptcy papers.

Write a forceful letter reciting the case number, date of filing, and date of the discharge order and demanding an end to collection. Send the letter return receipt requested. Keep copies of everything you send to the creditor.

If the creditor persists, the debtor can move to reopen the bankruptcy case and seek an award of attorneys fees and damages or sanctions for the creditor's violation of the discharge. Bankruptcy attorneys are becoming more active in court room attempts to get the debtor the peace that the discharge is supposed to provide. Judges are expected to order the creditor to pay the debtor's attorneys fees incurred in enforcing the discharge.

Check your credit report as well. The debt buyer may have reported non payment of the discharged debt to the credit reporting agencies, compounding the problem. Any damage to the debtor's post bankruptcy credit record may be another element of damages caused by the violation of the stay.