A Creditor Contacted Me After My Discharge: What to Do

The case is over and the discharge order came in the mail. Then a collection letter shows up on a credit card you listed, or the phone rings with a balance you thought was gone.

If the debt was discharged, the creditor generally cannot try to collect it from you, ever. Before you treat it as a violation, check three things: whether that debt was actually discharged, whether the contact is about a lien on property you kept, and whether you reaffirmed the debt.

If a lawyer handled your bankruptcy, call that lawyer first. They have your file and can act on it fastest.

What does the discharge actually do?

The discharge is a permanent court order that ends your personal liability on the debts it covers. It also works as an injunction, an order forbidding creditors from trying to collect those debts from you.

That covers lawsuits, garnishments, phone calls, letters and personal contact. A judgment a creditor got on a discharged debt can no longer be enforced against you personally.

When can a creditor still contact me?

Not every contact after discharge breaks the rules. These are generally allowed:

• Debts that were not discharged. Child support and alimony, most student loans, recent income taxes that fail the timing tests and certain other debts survive the discharge, so collectors can still pursue them.
• Liens on property you kept. A lien survives the discharge. If you stopped paying the car loan or mortgage, the lender can still repossess or foreclose on the property, even though it cannot sue you for the balance.
• Regular mortgage statements. A lender with a lien on your home can keep sending ordinary monthly statements and accepting payments, as long as it is not demanding that you pay personally.
• Reaffirmed debts. If you signed a reaffirmation agreement, a new promise to keep paying a debt despite the bankruptcy, and it took effect, that debt was not discharged.
• Co-signers. The discharge protects you, not someone who signed the loan with you. The creditor can still collect from a co-signer.

You can choose to repay a discharged debt if you want to. No one can make you.

How do I know whether this debt was discharged?

Find your discharge order and your schedules, the lists of debts filed with your bankruptcy petition. Check whether this creditor, or the original creditor on the account, is listed.

The name may be new. Old debts are often sold, so the company contacting you may be a debt buyer you have never heard of. Match the original creditor’s name and the account number on the letter to your paperwork.

A debt you forgot to list may still be discharged. It depends on the chapter, whether the trustee ever collected money for creditors, and whether the creditor knew about your case in time.

If you lost your discharge order, the clerk of the bankruptcy court that entered it can give you a copy, and it may also be available electronically through the court’s PACER system.

What should I do when a creditor contacts me?

Keep everything. Save every letter with its envelope, and screenshot texts and emails. Write down the date, time, caller’s name and what was said on every call, and keep any voicemails.

Don’t pay, and don’t agree to anything. A payment can be treated as a voluntary repayment, and a promise on the phone can create confusion later.

Send the discharge information. Many of these contacts are mistakes, such as a debt sold before the buyer’s records were updated. Send a short letter with your name, case number, the court and the date of your discharge, enclose a copy of the order, and ask the creditor to stop and correct its records.

Send it in a way you can prove, and keep a copy. If the contact stops, that may be the end of it.

Call your bankruptcy lawyer. If a lawyer handled your case, call that lawyer now, even if the case closed years ago. If you filed without a lawyer, call me.

What if they keep coming after me?

Then the court that granted your discharge can step in. Your lawyer files a motion asking the court to reopen the case and enforce the discharge.

The court does not charge the usual reopening fee when the motion is based on a violation of the discharge. If the court finds a violation, it can hold the creditor in civil contempt, which often means a fine.

The standard is not easy. The Supreme Court has held that a court may hold a creditor in contempt when there is no fair ground of doubt that the discharge barred what the creditor did, which is why your records and the letter you sent matter so much.

If you are sued on a discharged debt, don’t ignore it. Call me or your bankruptcy lawyer before the deadline printed on the papers. A default judgment, entered because you didn’t answer, is a mess to clean up even when the debt was discharged.

What about my credit report?

A discharged account should show a zero balance and a note such as “discharged in bankruptcy.” One that still shows a balance or a past-due status is wrong.

Dispute it in writing with each credit bureau that reports it, with a copy of your discharge order, and keep copies. I walk through the steps in building credit after filing bankruptcy.

If a creditor keeps reporting a discharged debt as owed to pressure you to pay, that can raise a discharge problem of its own. It depends on the facts, so bring the reports when you call.

Does it matter whether I filed in DC, Maryland or Virginia?

Not for the basic rules. The discharge is federal law, so it works the same way in the US Bankruptcy Court for the District of Columbia, the District of Maryland and the Eastern District of Virginia.

What matters is which court entered your discharge. That is the court that reopens the case and enforces its own order.

What should I do right now?

If a lawyer handled your bankruptcy, call that lawyer first. If you filed on your own, or your lawyer is no longer practicing, call me at (202) 448-5136.

Bring the letters, your notes on every call, your discharge order and your schedules. The consultation is free.

I handle bankruptcy in DC, in Maryland at the Greenbelt courthouse, and in the Eastern District of Virginia. Don’t wait. A record made today is worth more than a memory later.