If you file for bankruptcy and your debts are discharged, it means your debts have been legally forgiven and you no longer owe that amount. Unfortunately, many creditors fail to acknowledge this and may still attempt to collect the debt, even after a discharge. Occurrences of consumers experiencing debt collection attempts like these are a growing problem.
Sometimes debts that are forgiven by bankruptcy courts may be sold to a junk debt buyer, spawning continued harassment for consumers. In many cases, consumers wind up paying off debts they no longer owe. If a lender fails to revise their records on your credit report, this could pose a serious problem. One consumer experienced this with Capital One when he tried to secure a mortgage on a new home. Capital One demanded he pay the balance in order to proceed with the home purchase.
The law clearly defines your rights regarding debts that have been discharged in bankruptcy court. It is crucial that consumers are aware of these rights. You have the right to file a motion with the court and report the action, if a creditor attempts collection on a discharged debt. A discharge means that a permanent statutory injunction has been set in place, stopping creditors from collecting the discharged debt. Creditors who violate this injunction can face hefty fines.
Even though it is illegal for creditors to pursue discharged debts, the trend continues. In an effort to stop this and hold creditors accountable, the FTC has begun working on new regulations designed to stop creditors from going after discharged debts in court.
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.
Sources http://www.creditinfocenter.com/debt/dischargeddebtsreturn.shtml