A while back I promised more analysis of this article. This gist of the article is that those debts discharged by a bankruptcy court are not being honored as discharged. There are some powerful reasons for this
First, those debt collectors who we collecting on the debt prior to the discharge will continue to collect on these debts in violation of the discharge order. Second, the owners of the discharged debt will continue to sell these debts on the secondary market.
So why is this? The answer is simple – Money.
Those debt collectors who continue to collect know that they will eventually have the consumer over the barrel. Sooner or later, the consumer is going to need credit, and when they discover the debt collector has not been paid and the debt is not listed as discharged the consumer might very well just pay the debt in order to remove the credit roadblock. Those debt buyers have the same motive, they can purchase this discharged debt in hopes of getting the debtor to pay a debt he isn’t legally required to pay.
Even more interesting is that these actions are violations of numerous laws in addition to the bankruptcy court order. More recently I’ve seen a rise in credit reporting violations by these debt collectors. After the debt is discharged, there is no legitimate reason (permissible purpose) for those debt collectors to pull a credit report on the discharged debtor.
Unfortunately, this does not stop the debt collectors from doing so in an attempt to collect a debt which has been discharged. This is just another tool in their arsenal to continually abuse and harass the debtor even though they have been granted their fresh start provided by the bankruptcy.
This activity may very well be a violation of the Fair Debt Collection Practices Act (FDCPA) and/or the Fair Credit Reporting Act (FCRA).
If you have filed bankruptcy, you should also contact a consumer rights attorney who can help you pull your free annual credit report and determine if debt collectors are accessing your report in violation of the bankruptcy court order.
There are statutes of limitations at play for these violations, so you should contact a consumer rights attorney as soon as your discharge is granted. If you are in Minnesota, please feel free to contact me. If you are outside Minnesota, you can find a consumer rights attorney at the National Association of Consumer Advocates.
To find a consumer or bankruptcy lawyer, use the Caveat Emptor Consumer & Bankruptcy Lawyer Directory.
