Although it isn’t common, some creditors will insist that a debtor owes a discharged debt. Faced with a creditor who insists repeatedly that even though someone has filed bankruptcy she still owes them money the debtor might cave in and agree to pay. Don’t do it!
If It Was Listed, It’s Probably Discharged.
If a creditor was listed on the bankruptcy, that debt is discharged unless it falls into one of a few categories of non-dischargeable debts. These include student loans, most taxes, and domestic support obligations such as alimony, child support and property settlement agreements. These are the “Big Three” debts that are not discharged and where the creditor need take no further action. Other debts, such as a fraudulently incurred debt (the debtor lied about her financial situation); the debtor intentionally harmed another person or his property; or the debtor caused injury while driving under the influence of drugs or alcohol might be non-dischargeable but the creditor has to file a lawsuit within the bankruptcy (called an adversary proceeding) to have the judge determine whether the debt is non-dischargable. There are a few other categories of non-dischargeable debt, but they are rare.
Unlisted Debts Can Be Discharged Too.
Unless the debt the creditor claims is still owed is one of these types, bankruptcy covers it if it was listed. Even if it wasn’t listed, if the case is a “no asset” case, meaning the trustee didn’t sell or take any property and make a distribution to creditors, the debt is discharged.
Sometimes creditors aren’t aware of the bankruptcy when they first contact you. This could be because their records aren’t up to date, but more often it’s because the original debt was sold to a debt buyer. Debt buyers buy millions of dollars of old debt for pennies on the dollar. These usually come in the form of hundreds or even thousands of individual accounts. The debt buyer assigns these accounts to their debt collectors who start calling and writing, often without looking at anything more than the name, phone number, and amount that was owed. These debt collectors are hard-nosed because they get paid on a commission. If they don’t get a payment out of a debtor, they don’t get paid, so they are often relentless.
Don’t Stand for It.
When a creditor calls and says that a debtor owes a debt that was listed in her bankruptcy. the odds are the creditor is violating the discharge stay, which prohibits a creditor from trying to collect a discharged obligation. Debtors have remedies, such as reopening the bankruptcy case to have the court sanction the creditor. Don’t take it lying down; talk to your attorney if you keep getting calls from creditors after your bankruptcy.
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