How to Deal with Post-Bankruptcy Discharge Violations

Filing for bankruptcy can offer financial relief, but some creditors may illegally continue collection efforts even after a discharge. This violation of federal law can be distressing for individuals who have gone through the bankruptcy process. If you’re experiencing post-bankruptcy discharge violations in Alabama, it’s essential to know your rights and legal options. Taking action against these illegal collection activities can help protect your financial recovery and ensure creditors respect the bankruptcy court’s decision.

What Is a Bankruptcy Discharge?

A bankruptcy discharge is a court order that eliminates your legal obligation to repay certain debts. Under 11 U.S.C. § 524 of the U.S. Bankruptcy Code, once a debt has been discharged, creditors are prohibited from attempting to collect on it. This means:

• Creditors cannot contact you about discharged debts.
• Collection agencies cannot send letters or make phone calls.
• Lawsuits on discharged debts are illegal.
• Wage garnishments or other collection methods must stop immediately.

Despite these protections, some creditors ignore the law and continue collection efforts, violating the bankruptcy discharge order.

Common Types of Discharge Violations in Alabama

Post-bankruptcy discharge violations can take many forms, including:

• Collection Calls: Creditors or debt collectors persistently contacting you about a discharged debt. This includes robocalls, repeated harassment, or using different numbers to bypass call-blocking. In Alabama, this type of collection activity is strictly prohibited once the debt has been discharged.
• Demand Letters: Receiving written notices that demand payment on a discharged debt. Some creditors use deceptive wording to make it seem like payment is still required. These letters can cause undue stress and confusion, and they should be reported immediately.
• Credit Report Violations: A discharged debt still appearing as active or delinquent on your credit report. This can impact your credit score and make it harder to secure loans, rent housing, or even obtain employment. Under federal law, creditors must ensure discharged debts are properly updated in credit reporting agencies.
• Lawsuits on Discharged Debt: Creditors filing lawsuits in an attempt to collect debts that have already been eliminated in bankruptcy. These lawsuits can lead to default judgments if not properly addressed, putting financial strain on individuals who believed they were protected by their discharge.
• Wage Garnishment: Continuation of wage garnishment for discharged debts. Some employers may not be aware that a bankruptcy discharge voids previous garnishment orders, meaning they could still be deducting money from your paycheck unlawfully.
• Reselling Discharged Debt to Third-Party Collectors: Some original creditors sell discharged debts to collection agencies, which may then attempt to collect, unaware or disregarding the fact that the debt is no longer valid.
• Mortgage or Foreclosure Actions on Discharged Debts: If a mortgage lender or property owner tries to initiate foreclosure proceedings on a property that was included in your bankruptcy discharge, this constitutes a violation of your rights.
• Threatening Legal Action or Misrepresentation: Some creditors resort to threats, misrepresentation, or even false claims to scare you into making payments. This may include saying you will face criminal charges, lose your property, or suffer other legal consequences if you do not pay a discharged debt.

If you experience any of these violations in Alabama, you have legal recourse to protect your rights.

Steps to Take When a Creditor Violates Your Bankruptcy Discharge in Alabama

If a creditor attempts to collect on a discharged debt, follow these steps to enforce your bankruptcy protection:

Review Your Bankruptcy Discharge Order

• Ensure the debt in question was included in your bankruptcy case and discharged by the court.
• If you’re uncertain about your discharge details, check with your bankruptcy attorney or access your bankruptcy documents through the Alabama Bankruptcy Court’s online records.

Document All Communications

• Keep detailed records of every phone call, letter, email, or message from the creditor.
• Note the dates, times, and details of any violations, including the name of the person you spoke with and what was said.
• If possible, record voicemails or take screenshots of emails and letters as evidence.

Send a Cease-and-Desist Letter

• Inform the creditor in writing that the debt has been discharged and demand they stop all collection efforts immediately.
• Include a copy of your discharge order and reference 11 U.S.C. § 524, which prohibits collection attempts on discharged debts.
• Send the letter via certified mail with the return receipt requested to have proof of delivery.
• If the creditor does not comply, this letter can serve as strong evidence in court.

File a Complaint with the Bankruptcy Court

• If the creditor persists, you may need to file a Motion for Contempt in the bankruptcy court that handled your case.
• This motion asks the court to enforce your discharge and impose penalties on the violating creditor.
• In Alabama, you must file in one of the Northern, Middle, or Southern District Bankruptcy Courts, depending on where your bankruptcy was originally processed.
• Once filed, the court may require a hearing to determine if the creditor is in contempt and assess damages.

Consult a Bankruptcy Attorney in Alabama

If the violation persists or if you need assistance in filing legal action, it is strongly advised to consult with an experienced Alabama bankruptcy attorney. An attorney can review your case and determine the best course of action, communicate with the violating creditor on your behalf, file the necessary legal documents to enforce your rights, and represent you in court while seeking damages for any financial or emotional distress caused by the violation.

Legal Consequences for Creditors Violating a Discharge in Alabama

Creditors who violate a bankruptcy discharge order in Alabama can face serious penalties, including:

• Contempt of Court – The court may issue fines or sanctions against the creditor, which can include monetary penalties and even an injunction preventing further violations.
• Statutory and Punitive Damages – You may be entitled to compensation for emotional distress, financial harm, and legal fees, particularly if the violation is willful or egregious.
• Attorney’s Fees – The court may require the violating creditor to cover your legal expenses, ensuring that you are not financially burdened for enforcing your rights.
• Additional Sanctions – Courts may impose further penalties, such as ordering the creditor to pay punitive damages or forcing corrective actions like removing erroneous credit report entries.

Repeated or willful violations can lead to severe penalties, making it crucial to take legal action if you experience harassment after your bankruptcy discharge in Alabama.

How Alabama Residents Can Protect Themselves from Post-Bankruptcy Creditor Harassment

If you’re an Alabama resident dealing with post-bankruptcy discharge violations, here are some additional steps to protect yourself:

• Regularly Check Your Credit Report – Ensure that discharged debts are properly marked as such and that no new collection efforts are recorded.
• Keep Copies of Legal Documents – Always have copies of your discharge order and any communications with creditors.
• Know Your Rights Under the Fair Debt Collection Practices Act (FDCPA) – This law protects you from deceptive and unfair collection practices.
• Report Violations to the Consumer Financial Protection Bureau (CFPB) – The CFPB can investigate collection agencies that violate consumer protection laws.

When to Seek Legal Help for a Post-Bankruptcy Discharge Violation in Alabama

If you believe a creditor is violating your bankruptcy discharge, consulting an attorney is often the best course of action. A bankruptcy attorney can help by:

• Evaluating whether the creditor’s actions constitute a legal violation.
• Sending demand letters on your behalf.
• Filing a motion for contempt with the bankruptcy court.
• Pursuing damages and legal remedies.

Contact Our Reputable Alabama Bankruptcy Attorneys

If you’re dealing with creditor harassment after bankruptcy in Alabama, don’t ignore the situation. Enforcing your bankruptcy discharge rights can prevent financial and emotional stress. Contact Padgett & Robertson today for a consultation and learn how we can help you take legal action against non-compliant creditors in Alabama.