Discharged creditor still attempting to collect

[Jc0187]

Hello all! My ch. 7 was discharged in August of 2018. I did NOT reaffirm my auto loan, but, continued paying on it till February of 2020, at which I surrendered the vehicle.

In March, the credit union (auto creditor) started hounding me about past due payments. I contacted them and reminded them of the discharge ( of which they were definitely included in). They acknowledged that the debt was discharged and said they will note the account. Since then, now late April, I have continued to receive correspondences from them in the mail threatening collections.

I have reached out to my attorney that filed my bankruptcy but have not heard anything back. At this point, I’m trying to do anything to prevent this from going into collections. What course of action should I take at this point?

[justbroke]

The debt was discharged. The credit union is wrong. Try to see if they have a specialized Bankruptcy department which knows how to handle this correctly. I know that larger CUs have flags in their system to prevent this type of debt collection (e.g. NFCU and USAA). A smaller CU may not be as sophisticated. I would send them a letter, certified mail return receipt, demanding that they stop all collection attempts or face a contempt finding with sanctions.

Of course, it's better if your attorney handles this, but starting and keeping good documentation is a way to demonstrate the constant collection attempts, should it need to go to a hearing.

[Jc0187]

The debt was discharged. The credit union is wrong. Try to see if they have a specialized Bankruptcy department which knows how to handle this correctly. I know that larger CUs have flags in their system to prevent this type of debt collection (e.g. NFCU and USAA). A smaller CU may not be as sophisticated. I would send them a letter, certified mail return receipt, demanding that they stop all collection attempts or face a contempt finding with sanctions.

Of course, it's better if your attorney handles this, but starting and keeping good documentation is a way to demonstrate the constant collection attempts, should it need to go to a hearing.

Ok. I mean, I have contacted them, and they KNOW that the debt is discharged. At this point, I’m hoping I can find an attorney that is willing to pursue a suit for defying the bankruptcy courts. It’s either they don’t care or that they don’t want to accept that the debt is discharged. Either way, they should be fined for how they are going after me for the discharged debt.

[justbroke]

Everything should always be done in a writing. It should always be a demand letter with explicit notations of the discharge date and the debt and that further communication regarding the debt can and will lead to a Motion for Sanctions.

It's better that an attorney do this as they know the process and procedures for obtaining sanctions for violation of the permanent discharge injunction. You could learn how to do it, but you must be a little skillful if trying to both demonstrate and seek actual damages (and perhaps punitive damages if it's particularly egregious).

By the way, welcome to BKForum.

[Jc0187]

Everything should always be done in a writing. It should always be a demand letter with explicit notations of the discharge date and the debt and that further communication regarding the debt can and will lead to a Motion for Sanctions.

It's better that an attorney do this as they know the process and procedures for obtaining sanctions for violation of the permanent discharge injunction. You could learn how to do it, but you must be a little skillful if trying to both demonstrate and seek actual damages (and perhaps punitive damages if it's particularly egregious).

By the way, welcome to BKForum.

Thanks for the advice! I’m going to continue to reach out to my attorney and see if we can do something about this.

[flashoflight]

Ok. I mean, I have contacted them, and they KNOW that the debt is discharged. At this point, I’m hoping I can find an attorney that is willing to pursue a suit for defying the bankruptcy courts. It’s either they don’t care or that they don’t want to accept that the debt is discharged. Either way, they should be fined for how they are going after me for the discharged debt.

There are a couple of problems.

Look at your retainer and see if any services are included post discharge.

If you pursue an AP or file or motion, you will probably have to pay for the legal fees upfront. One big problem is that if you don't have real damages, you lose. So far it doesn't sound like you have any damages. To me, it would be very risky to take unpaid time off from work to deal with this thus supposedly creating damages. You also may get a bad judge who says the actions were not willful and then you lose again.

I'd try to contact the person at the CU that handles bankruptcy to get this nipped in the bud. Suing them may be a lot harder than you think.