If you have filed Chapter 7 bankruptcy and your unsecured debts have been discharge this discharge constitutes a permanent statutory injunction prohibiting creditors from taking any further future actions against you. Actions which are prohibited include filing a lawsuit or continuing to harass you for debt payments for the discharged debts. Recently on our bankruptcy forum a user asked, “I recently filed Chapter 7 bankruptcy and a credit card debt for $2,000 was discharged. Unfortunately, the collection agency has continued to attempt to collect the debt. What are my options?”
First steps to stopping the collection agency
If a credit agency continues to harass you for debt which has been discharged in a Chapter 7 bankruptcy you should file a motion with the court. The motion is a request reporting the violation and asking that the case be reopened to address the matter. After the court reviews your motion and decides there has been a violation by the collection agency they can decide to sanction the creditor for violating the discharge injunction. Sanctions constitute a civil contempt charge and may result in a fine against the collection agency.
Does the collection agency have to notify the credit reporting agencies?
If you have filed bankruptcy it is important you understand your legal rights. First, you have the right to have truthful and accurate information reported to the credit bureaus by the collection agency, which means the creditors who provide information to the credit bureaus must provide information which is accurate and truthfully represents the state of your debt.
For instance, if you have filed bankruptcy the bankruptcy can remain on your credit report for up to 10 years. Discharged debts, however, can no longer be reported as past due, unpaid, or delinquent but must be updated and reported as discharged and having a zero balance or discharged, included in bankruptcy.
If the collection agency has not updated the creditor report and the balance remains above zero, remains in owed or active status, shows it to be outstanding or delinquent, or is marked as “charged off” this could violate the provision of the FCRA and could be considered incorrect information.
Notify the collection agency of any debts which are misreported and make sure they understand that continuing to attempt to collect discharged debts is a violation of the bankruptcy discharge injunction.
Why does my credit report need to be accurate?
If you have filed bankruptcy you may have a low credit score. Increasing your credit score, however, can only be done by insuring you have accurate post-discharge information. The first step following your bankruptcy discharge is to request an updated credit report from TransUnion, Equifax, and Experioan.
The second step is to review all of your debts and make sure discharged debts have been updated. If your debts have been sold you may see new and unfamiliar collection agency names, which could be third party debt collectors. These collectors, however, also have the responsibility to make sure your debts are updated.
Taking the right steps following bankruptcy and talking to creditors if there are reporting errors will help improve your credit score and ultimately put you back on track to financial stability.
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