At Bond & Botes we help people file for Bankruptcy relief, but it’s also important to us that our clients are protected after the case is finished. The whole point of going through a bankruptcy is to receive a “fresh start” for your financial situation. With that in mind, I wanted to use this blog post as an opportunity to discuss some important rights and protections that extend even after a bankruptcy case is finished.
The first and most important protection is called the discharge injunction. In the same way the Automatic Stay protects you from creditors during a bankruptcy case, the discharge injunction protects you after the case is over. The discharge injunction prohibits any creditor from attempting to collect from you on a debt that was discharged in the bankruptcy case. So you can’t be sued for a discharged debt and creditors cannot send you bills or collection letters. The discharge injunction also applies to phone calls or verbal demands for payment. The strongest part of this protection is that it is permanent. Once a debt is discharged, the creditor cannot ever attempt collection again.
Updated Credit Report
The discharge of a debt also extends to your credit report. A discharged debt cannot continue to report negatively against you on any of the three credit reports (Equifax, Experian, or TransUnion). In fact, associated laws such as the Fair Credit Reporting Act (FRCA) specify exactly what information can be shown. So if you have received a discharge in bankruptcy, but you still aren’t receiving the full benefit then please call and set up an appointment with one of our offices to discuss your rights.
Discharged Debt Becomes Non-Enforceable
Finally, having a discharge makes a discharged debt non-enforceable. This is an important distinction for other areas of consumer rights. For example, the Fair Debt Collection Practices Act (FDCPA) provides for statutory fines and penalties against a debt collector that attempts to collect on a debt that isn’t legally owed. So if you receive any collection letters or phone calls after receiving your discharge, then not only could you have a cause of action in Bankruptcy Court for a violation of the discharge injunction, but you may also have a cause of action in Federal District Court for an FDCPA violation.
We want to make sure our clients receive the full benefit of their decision to file a Bankruptcy Case. While other firms may forget you as soon as your case is finished, we want to support you even after your case is done, and we recognize that protecting your rights as a consumer requires knowledge of more than just the Bankruptcy Code. So if you’re considering a bankruptcy case, we have convenient offices in Alabama, Tennessee, and Mississippi. You can set up a free initial consultation with one of our experienced attorneys to help you make a plan back to financial security.
Nick Gajewski is an Associate Attorney at the Bond & Botes Law Offices in Florence and Haleyville, Alabama. He holds a Bachelor of Arts from the University of Alabama, and a Juris Doctorate from the University of Alabama School of Law. Nick joined the team of Bond & Botes bankruptcy lawyers back in 2014 and has been helping clients navigate financial issues since. Read his full bio here.