The Discharge Injunction: “Gone Means Gone”

When you complete your bankruptcy, the court issues a Discharge Order. This replaces the Automatic Stay. It is a permanent federal court order prohibiting creditors from attempting to collect discharged debts as a personal liability.

Violations (Contempt of Court)

If a creditor tries to collect a discharged debt, they are in civil contempt of the bankruptcy court. Common violations include:

1. Zombie Debt: Selling the discharged debt to a debt buyer who tries to collect it years later.
2. Credit Reporting: Reporting the debt as “Charge Off” or “Past Due” with a balance, instead of “Discharged in Bankruptcy” with a $0 balance.
3. Refusal to Release Liens: In some cases, refusing to release a lien that was avoided during the bankruptcy.

Reopening the Case

If a creditor violates the discharge:

1. We Reopen the Case: We file a motion to reopen your closed bankruptcy case.
2. We File a Contempt Motion: We ask the judge to hold the creditor in contempt.
3. Sanctions: Courts can award significant sanctions to punish the creditor and compensate you for having to hire a lawyer again.