After bankruptcy, your life is supposed to get easier. No more bills, no phone calls, no contact whatsoever. It is the new beginning that was promised to you from the beginning.
But then it takes over the seediest part of debt collection: the people actively trying to collect debts after bankruptcy. Some of these attempts will sound innocent enough, while others will be downright nasty and abusive.
Why do creditors try to collect after bankruptcy and what can you do about it?
The “why” part is easy. They try to charge because they believe that you are not informed about your rights. Maybe you forgot who your bankruptcy attorney was or, better yet, maybe you didn’t file for bankruptcy with an attorney in the first place. If so, the chances of you complaining about the post-bankruptcy collection attempt are slim at best.
Sometimes it is the original creditor, but more often it is a company that buys bad debts in the hope that they will pay off. These companies do not spend a lot of money to buy these debts, so they only need to collect a few bills to make a considerable profit.
What can you do about it? That is also quite simple. Section 524 (a) (2) of the US Bankruptcy Code states that:
(a) A discharge in a case under this title (2) operates as a court order against the commencement or continuation of an action, the use of a process or an act, to collect, recover or settle any debt as personal responsibility of the debtor, whether or not he is exempted from the forgiveness of said debt … “
In other words, when someone tries after bankruptcy to collect a debt that has been canceled, they are breaking the law outright. It is considered contempt of court, which means that someone is violating a court order.
In case you need to be told, violating a court order is a no-no. And when it comes to bankruptcy, those court orders give you a lot of protection after bankruptcy.
If a creditor was listed in your bankruptcy, you may have legal rights against them for violating bankruptcy laws. But if they are not listed, your rights may be outside of the US Bankruptcy Code.Either way, however, you have ways of forcing them to leave you alone after bankruptcy.
Life after bankruptcy can be a wonderful thing. No more hassle with bills and a fresh start in life. But if bill collectors spring into action after bankruptcy, you need to be prepared to take steps to keep them at bay.