Post-Chapter 13 Discharge - Creditor still showing balance owed

[Jeffster]

I received my Chapter 13 discharge on 1/5/21. I paid 100 percent of all claims.

About a month after discharge, I visited the website of a Credit Union I Included in bankruptcy. Their website shows a balance of $213.49 with the notation “ Charged Off.” My credit reports are correct regarding this account, however, and show a zero balance.

This account was NOT charged off prior to bankruptcy, and was included in the bankruptcy with no objection from the credit union.

I contacted their Bankruptcy Department then, and informed them that their internal records are incorrect, and that they make it appear that I owe the money. They promised to get back to me. Of course, that did not happen. I gave it some time and contacted them again. They promised to look into it.

Yesterday, I received the following email from them...

”I apologize that I was not able to give you a call back yesterday, but I received an answer first thing this morning. Unfortunately, according to how our system is set up, there is no way to remove the leftover amount off our books for you to re-apply for membership. To re-apply for membership, voluntary payment of the balance on the Credit Card ($213.49) along with unpaid interest that was applied before your bankruptcy filing ($63.70) would need to occur for you to be a member in good standing. The total amount is $277.19.”


I replied back that I was NOT interested at all in re-applying for membership but that I did have an interest in seeing that their records are correct. My concern is that, somewhere along the way, someone at the CU will see the balance and either mistakenly send it to collections, or sell it to a JDB.


My response to their email...

”I did not initially contact you to regain Credit Union membership. I contacted you because a debt that was paid, and properly discharged in bankruptcy, continued to show in Credit Union records as owing.

You told me on that call that I need to pay the $213.49. I told you that I am not willing to pay a debt that has already been discharged, and that you are in violation of bankruptcy laws.

The issue is the fact that the Credit Union is violating the terms of my Bankruptcy Discharge. I am not really interested in being a member of a Credit Union that violates Bankruptcy laws, but I do have an interest in seeing this amount dealt with in accordance with the law.

The Credit Union had the opportunity to object to the discharge, but did not. I paid 100 percent of the claims in my Chapter 13, and you are violating my rights under BK laws by continuing to argue that I owe money that was already paid, and for which I received a discharge.

Creditors are barred from trying to collect on debts that were discharged in bankruptcy. Once the debt is discharged by the bankruptcy court, the discharge permanently bars the creditor from collection of the debt. By your own admission on at least two occasions...one in writing...you are trying to collect on a debt which was included in the discharge.

I have included a copy of my discharge because, apparently, the Credit Union wants to ignore its existence.

I would like an expeditious response.”

Of course, no response from the CU. I do not want membership. I want to ensure that they don’t try to come after me later for this debt I already paid. Apparently, they think the limitations of their own messed-up system mean I still owe them.


This same CU violated the automatic stay about a month after I filed and kept taking money out of my linked bank account at another institution.

Do I have any recourse? Do I sue? Should I even worry about it?

[shipo]

I have two questions:

1. You say they had a chance to object to your bankruptcy filing, but you don't say if they filed a claim; did they?
2. Have you checked the ndc.org site to confirm they were paid by your Trustee?

[justbroke]

Have you attempted to just dispute the credit bureau reporting?

[Jeffster]

I have two questions:

1. You say they had a chance to object to your bankruptcy filing, but you don't say if they filed a claim; did they?
2. Have you checked the ndc.org site to confirm they were paid by your Trustee?

Hi...

Yes...they filed a claim and were paid 100 percent of the claim. They were paid by the Trustee, and this is verified on ndc.org.

[Jeffster]

Have you attempted to just dispute the credit bureau reporting?

Hi...The credit reporting is correct. It shows zero balance and that it was included in bankruptcy but my concern is that this rogue amount on the Credit Union’s books will come back to haunt me...either via changed reporting on my CR at some point; or via them sending it to Collections; or via them selling it to a JDB.

They were paid 100 percent and their records should reflect that.

[justbroke]

For their internal accounting I would not worry about it. It can never come back to haunt you as I'm certain they have a bankruptcy flag (indicator) which is why they are not pursing the amount. Now, I do agree that there is something in their accounting which shows this amount. Only they can explain the amount. Perhaps ask them, in a writing, to give you a detailed accounting since the day before you filed bankruptcy. In that way you could perform your own audit.

I do have a question, though. You were in a 100% Chapter 13, or did you just pay 100% of the claim? In a 100% Chapter 13, interest is also paid so the claim amount would be X but the true total would be X + interest.

Since this is not a credit reporting issue, I would not worry about this. I don't see that they are violating anything under bankruptcy law. Even them asking you to voluntarily repay, when you initiated the contact, is not a violation.