The bankruptcy laws have been enacted to make life easier for people who are undergoing tremendous financial losses. However, despite filing for bankruptcy and getting a discharge, many times, creditors still harass debt filers for dues. Citing the bankruptcy case of Jarvar, Stanley E. and Barbara J.; In re (Jarvarv. Title Cash of Montana Inc., et. al.), the Los Angeles based law firm Recovery Law Group respite is available to debtors from creditors who violate bankruptcy discharge. Such creditors can be held in civil contempt.
How Jarvar v. Title Cash of Montana Inc., et. al. Bankruptcy Case Changed Things
In the above case, debtors had filed for bankruptcy under Chapter 13 with Title Cash filing proofs of claim for 2 secured claims, an amount of $7,290 each. On a later date, they withdrew both secured claims to file a single POC for a secured claim of $14,605. The debtor’s case was converted to Chapter 7 and dismissed.
As per the trustee’s final report, Title Cash had $6,046 in principal and $1,041 in interest. The debtor then filed for Chapter 7 relief in September 2004 with Title Cash scheduled as a secured creditor and received a discharge on January 1st, 2005. However, in September 2008, the debtor filed for a state court action against Title Cash with the latter responding with a counterclaim requesting in personam relief against the debtor.
This led to the filing of an adversary proceeding for a violation of Section 362 and 524. The bankruptcy court granted summary judgment to the debtor for seeking relief for a discharge injunction violation. Since Title Cash couldn’t file a statement of genuine issues, the facts submitted by the debtor in her Statement of Uncontroverted Facts were acknowledged.
The creditor (Title Cash) was in violation of bankruptcy discharge, as he attempted to make the debtor personally liable (in personam) for the debt post its discharge. This is not a rare occurrence but a common practice amongst creditors. Violation of debtor’s bankruptcy discharge costs not just the debtor’s time and energy but also money which is of great importance in the current scenario. However, there have been instances when debtors have received compensation for this behavior of creditors (violation of bankruptcy discharge).
In case a creditor is asking for payments even after your debt has been discharged in bankruptcy, you don’t need to bow down to any pressure. Contact your bankruptcy attorney to deal with such creditors.