If you’ve taken the long road through bankruptcy to climb out from under your debt and have had some or all of your outstanding debt discharged, you have the right to feel like you’re in the clear. Unfortunately, there are times when creditors may ignore your debt being discharged and still attempt to collect what they feel you owe them. When this happens, you need to know what to expect and how to go about dealing with it.
At The Law Offices of Wes Stover, we are proud to help individuals who are looking for long-term solutions to the crushing debt that has kept them weighed down. Throughout the bankruptcy process and beyond, we are here to help.
We serve the needs of all Mississippians wherever they may reside. With offices in Jackson Mississippi and Laurel Mississippi, we are prepared to assist you. Call (601) 401-8996 or email wes@wesstover.com today to schedule a free consultation.
Understanding Discharge
In order to understand how to deal with creditors who ignore debt being discharged, it is helpful to have a basic understanding of discharge. In its simplest terms, a discharge refers to a release of debt obligations an individual receives by filing for bankruptcy. This discharge is a formal and permanent order that legally prevents creditors from pursuing the collection of a debt.
What Debts Are Discharged?
Not all debt is eligible for discharge through bankruptcy. In most cases, non-dischargeable debt includes tax debts and debts resulting from court-mandated payments (alimony, child support, etc.). Other types of debt, such as credit card debt, defaulted loans, and other common debts are largely all eligible to be discharged through bankruptcy.
When Does It Occur?
The timeline for having debt discharged is dependent upon the type of bankruptcy filed. Under Chapter 7 bankruptcy, debt can be officially discharged relatively quickly, often within a few months of filing. Under other types of bankruptcy, such as Chapter 13, debt is not discharged until the debtor’s repayment plan has been completed, which can take three to five years.
How Are Creditors Notified of Discharge?
Creditors are required to be notified of debt discharge by the clerk of the bankruptcy court, who will mail the notification according to the Federal Rules of Bankruptcy Procedure. The creditor is informed that the debt owed to them has been discharged and that any subsequent efforts to collect on the debt can put the creditor at risk of legal punishment.
Creditor Objections to Discharge
Under the bankruptcy code, any creditor has the right to object to a debt being discharged, with good cause shown. If a creditor wishes to object, their written objection must be filed within the time frame allotted in the notice the creditor receives at the beginning of the case.
What It Means
An objection to a discharge is simply a creditor’s attempt to dispute that the debt is dischargeable. The creditor may not be interested in a lengthy and expensive legal battle, but instead will simply ask the court to reconsider the decision to classify the debt as dischargeable.
Why Creditors Object
Some of the more common reasons a creditor may object to a debt being discharged include substantial credit charges in the immediate time preceding the bankruptcy filing, cash advances prior to bankruptcy, or suspicion of bankruptcy fraud.
What Can Be Done?
When a creditor files an objection to a discharge, both sides will have the opportunity to make their cases in court before the judge makes a ruling on the objection. Under many circumstances, creditors will agree to settle the objection by taking only a portion of the amount owed.
What to Do When a Creditor Attempts to Collect on a Discharge
An Order of Discharge is a permanent and legally binding ruling from the Court. If a creditor attempts to collect on a debt after it has been discharged, you should report this to your attorney so he or she can alert the Court. Then, if the Judge determines that the creditor has violated the Court's Order of Discharge, they may be found to be in contempt of the order, leaving them open to fines or other penalties.
Don’t Face Your Challenges Alone
When you have already dealt with the overwhelming obstacles of financial debt and taken the steps necessary through the bankruptcy process to get a fresh start, the last thing you want to do is find yourself being confronted by creditors you thought you didn’t have to worry about anymore. The unfortunate truth is that some creditors simply won’t stop even after your debt has been discharged. The good news is that there is help available to you.
If you’ve been contacted by creditors who are not respecting the discharge you have received for your debt, working with an experienced bankruptcy attorney can provide you with the counsel and guidance you need.
At The Law Offices of Wes Stover, we are ready to protect your rights and lead you in the right direction. With offices in Jackson Mississippi and Laurel Mississippi, we are ready to assist all Mississippians wherever they may reside. Call (601) 401-8996 or email wes@wesstover.com today to schedule a FREE consultation, in person or on the phone, to learn more about your legal options.