Debt Collection Post Bankruptcy


This week, I read a great New York Times article entitled “Debts Canceled by Bankruptcy Still Mar Consumer Credit Scores.” 

The article discusses illegal debt collection, something that I come across regularly in in my practice. In short, after a bankruptcy discharge from a personal Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, no debt collector can demand payment from you for debts. The bankruptcy discharge offers forgiveness for your debts.

Tens of thousands of Americans who went through bankruptcy are still haunted by debts long after — sometimes as long as a decade after — federal judges have extinguished the bills in court. The problem, state and federal officials suspect, is that some of the nation’s biggest banks ignore bankruptcy court discharges. Paying no heed to the courts, the banks keep the debts alive on credit reports, essentially forcing borrowers to make payments on bills that they do not legally owe. Lawyers with the U.S. Trustee Program are investigating JPMorgan Chase, Bank of America, Citigroup and Synchrony Financial, formerly known as GE Capital Retail Finance, suspecting the banks of violating federal bankruptcy law by ignoring the discharge injunction. The banks say that they comply with all federal laws in their collection and sale of debt. At the center of the investigation is the way banks report debts to the credit reporting agencies. Once a borrower voids a debt in bankruptcy, creditors are required to update credit reports to reflect that the debt is no longer owed, removing any notation of “past due” or “charged off.” But the banks routinely fail to do that, according to the people briefed on the investigation, as well as interviews with more than three dozen borrowers who have discharged debts in bankruptcy and a review of bankruptcy records in seven states. Still, federal judges have started to raise alarms that some banks are threatening the foundations of bankruptcy. Bankruptcy Judge Robert D. Drain said in one opinion that debt buyers know that a bank “will refuse to correct the credit report to reflect the obligor’s bankruptcy discharge, which means that the debtor will feel significant added pressure to obtain a ‘clean’ report by paying the debt,” according to court documents


Have you filed a Chapter 7 Bankruptcy or Chapter 13 Bankruptcy and received a discharge? Are you in an active Chapter 13 Bankruptcy Plan and receiving calls and letters from creditors included in your bankruptcy? Are creditors you included in your bankruptcy still sending you collection notices? Calling you? Calling your work? Threatening to sue you? They are violating New Jersey debt collection law, the Federal Debt Collection Practices Act, and federal law pursuant to the United States Bankruptcy Code. I can use the law to ensure that they never harass you again and get you a few bucks for the illegal activity as well.

What You Should Do

If you are receiving any creditor phone calls post-discharge, start recording them. There are applications to record phone calls on your cell phone. Save all messages left for you on your home phone and cell phone. Also, save any collection letters and notices that you get. Then, call me to come in and meet for a free confidential consultation. I will assess any causes of action and go after your creditors so that you can live a decent life with respect and dignity.


Have you been discharged from bankruptcy? Now is the time to pull your free credit reports. Visit to get your credit reports for free as authorized by Federal Law. Are there debts on your credit report that should have been forgiven in your bankruptcy but are still appearing on your credit report? Come see me. We will use the Fair Credit Reporting Act to ensure that not only are you forgiven of your debts from the bankruptcy discharge, but that most importantly, your credit reporting is correct. I look forward to working with you.