The “Sold” Discharge: Why a Debt Buyer is Calling About Your Bankrupt Account

You filed for Chapter 7 bankruptcy two years ago. You received your discharge. You thought you were free.

Then, you get a letter from a company like “Portfolio Recovery,” “Midland,” or “LVNV Funding” demanding payment on an old credit card that was included in your bankruptcy. Or worse, they start calling you.

This is not just annoying; it is a violation of a federal court order.

The Discharge Injunction (11 U.S.C. § 524)

When you receive a bankruptcy discharge, the court issues a permanent injunction that prohibits creditors from taking any action to collect a discharged debt as a personal liability. This includes calling, writing letters, or selling the debt to someone else.

Why It Happens: The “Zombie Debt” Market

Banks often sell their “uncollectible” accounts in bulk to debt buyers for pennies on the dollar. Sometimes, due to sloppy record-keeping, they accidentally include discharged accounts in the sale file. The debt buyer then loads your account into their auto-dialer without checking the bankruptcy records.

Double Damages: Contempt + FDCPA

When a debt collector tries to collect a discharged debt, they are liable under two powerful laws:
1. Contempt of Court: We can reopen your bankruptcy case and ask the judge to sanction them for violating the discharge order.
2. FDCPA Violation: Under the Fair Debt Collection Practices Act (15 U.S.C. § 1692e), it is illegal to misrepresent the legal status of a debt. Claiming you owe money that was legally wiped out is a false representation.

We Make Them Pay

You do not have to explain your bankruptcy to them. If they contact you about a discharged debt, call us. We can sue them for statutory damages, actual damages (emotional distress), and your attorney’s fees.