File for Sanctions or Adversary Proceeding over Proof of Claim?

[DoctorWho]

I have a debt collector on my current BK filing a proof of claim for a debt that isn't theirs and is no longer mine (was discharged in a Chapter 7) I don't want to go to in depth with the situation, but this isn't the first time they've tried this and they continue to harass me.

Would it be easier to file for sanctions or would an adversary proceeding be better against the proof of claim? An objection has been filed and the time has ran out for them to correct/amend/remove their claim ad they didn't answer it.

I'm looking for cases where people have sued/asked for sanctions/filed an adversary proceeding and received monetary damages from it.

Any cases or direction to find them would be appreciated!

As always, thanks for this forum. I've read at least 100 threads in the past few hours dealing with claims and filings. It's been very informative.

[IamOld]

I'm sorry I can't help with the question, but as a fellow fan of the good Doctor, I'm sure that you'll be able to prevail on these Daleks!!!

[HHM]

Well, without more detail, it may be hard to give advice.

If they filed a POC (proof of claim), were you an asset chapter 7?

If yes, then to get the claim denied, an objection needs to be filed.

If there is any further wrong doing, then you would file for sanctions.

[DoctorWho]

Is there any cases that you know of where someone has won said sanctions?

Thanks for the reply.

[HHM]

Is there any cases that you know of where someone has won said sanctions?

Thanks for the reply.

Sanctions for what?

I have a debt collector on my current BK filing a proof of claim for a debt that isn't theirs and is no longer mine (was discharged in a Chapter 7)

The problem, that sentence makes no sense. Or, to give you the benefit of the doubt, lacks context.

[DoctorWho]

Sanctions for filing a false claim.

The claim is for debt that they bought (that is gone) and they are still trying to collect. Like I said, I would say more..but it's not advisable in public.

[HHM]

Well, we need some context.

Why is it a false claim?

Why is the claim gone...are you on a 2nd BK, it simply is not clear the situation.

For example, did you file chapter 7 BK, receive a discharge, and now you have filed a chapter 13 (for whatever reason); and in this chapter 13, they have filed a Proof of Claim?

[DoctorWho]

It was discharged in a 7. On counsel's advice, a chapter 13 was filed (it has been three years since the 7). The debt they are trying to collect was in the chapter 7 and was part of the discharge.

[HHM]

Was that so hard to describe?

All you need to do is file an objection to the Proof of Claim. You can try to move for sanctions, but such a motion would probably be denied.

[DoctorWho]

Yes actually because that's not really the full situation.

And why would sanctions be denied?

[despritfreya]

I don't believe sanctions are appropriate. This issue comes up all the time and is rectified by a simply objection to the claim - which you have done. You must remember that a Discharge does not make the debt go away. You still owe the $$. The creditor simply cannot collect it. If you were sued for the debt you would have to raise the Affirmative Defense of "discharged in bankruptcy". If you fail to raise the defense you would lose it. The proof of claim issue is no different. You have raised the defense and your objection will be sustained by the court.

Now, if the creditor were to fight the objection. . . that would, in my opinion, rate the imposition of sanctions.

As it relates to the violation of the discharge injunction between the time you obtained your discharge and the time you filed the 13, you would have had to reopen the 7 and asked the court to hold the creditor/collection agency in contempt since there in no "private right of action" for such a violation. You did not do that so, just knock out the claim in the 13 and let it be.

Des.

[lrprn]

Yes actually because that's not really the full situation.

If you can describe the full situation (or at least provide enough detail to help us see the situation more clearly), that would help us help you better.

And why would sanctions be denied?

To get monetary sanctions decreed by the bk court for violation of your Ch 7 discharge or the FTC through the FDCPA (Fair Debt Collection Practices Act) law for seeking payment of a debt already discharged through Ch 7, you have file an action and also prove you have been damaged by the creditor's or collector's actions. Can you prove in court that you've been damaged (significant financial losses are what the court typically looks for) by what this creditor/collector has done?

[DoctorWho]

This the core problem. The debt was sold during the Chapter 7, without telling the bankruptcy court. They have reported on my credit, so they know it's discharged. They have filed the claim as the buyer of the debt, on behalf of the original servicer. The debt was owed to someone who no longer exists and the servicer didn't have rights to sell it to the current "collector" that has filed within the 13.

One attorney I spoke to said discharge violations can be brought up in the current bankruptcy and issues relating to the proof of claim containing fraudulent information. Now, I'm getting conflicting answers on here.

They have caused monetary damages as their claim has took time, money, and has even threatened my confirmation since they have tried to add a debt that would put me over the allowed unsecured debt limit. So I have had to deal with a lot of things here..and there are other outside damages that I don't wish to discuss.

So, as I asked in the beginning, do you have case law to support these opinions? I have seen cases filed about proof of claims and zombie debts in adversary proceedings..and asking for 105 sanctions inside the regular bankruptcy.

[justbroke]

The debt was sold during the Chapter 7, without telling the bankruptcy court.

They don't need to. The only reason to notify the court would be if they are dealing with a claim in an asset case.

They have filed the claim as the buyer of the debt, on behalf of the original servicer. The debt was owed to someone who no longer exists and the servicer didn't have rights to sell it to the current "collector" that has filed within the 13.

You just object to the claim.

One attorney I spoke to said discharge violations can be brought up in the current bankruptcy and issues relating to the proof of claim containing fraudulent information. Now, I'm getting conflicting answers on here.

They can't be brought up in the "current" case because they didn't make any violation in the "current" case. You're best off, if you choose to go down this path, re-open the "old" case to deal with any violation under 11 USC 105... if the Judge wants to hear it.

As someone who has worked these issues recently, let me say a few things. A creditor can make a claim in a bankruptcy, even if the Statute of Limitations has passed or the debt isn't even yours. The process of policing claims is the debtor's (attorney) job (and sometimes the Trustee's as well but mostly in Chapter 7s, not usually Chapter 13s). If the claim is wrong, you object. The claim is denied. Done.

If they actually violated the permanent discharge injunction -- and remember that filing a claim is NOT a violation of the stay of discharge injunction (been there, tried that!) -- post-discharge of the Chapter 7, then you may have a chance under the court's equitable powers to impose sanctions for contempt (11 USC 105). However, you'd re-open the old Chapter 7 case and file under that case since they'd be violating THAT case's injunction.

An attorney would help you more and determine whether it's even worth pursuing.

(Okay, des actually wrote this too. He's much more eloquent than I will ever be.)