How do you collect on a debt that was charged off in bankruptcy?
Full Question:
Answer:
I'm uanable to determine the plaintiff's relationship to the debtor from your question. As soon as a debtor files the proper legal documents requesting bankruptcy protection, the automatic stay takes effect. This means that all efforts by creditors to collect from the debtor are, by law, frozen, and a creditor who ignores the automatic stay faces severe penalties. It is possible for a creditor to file a petition for relief from the stay, and if granted by the court, the creditor may continue collection efforts. A debtor may also reaffirm the debt, so that the debtor agrees to pay the debt and not have it discharged in the bankruptcy.
If the creditor of a discharged debt continues collection attempts it is a violation of Federal Bankruptcy Law and subject to court sanction. A discharged debtor may send a letter telling the creditor that if it continues to try to collect funds that have been discharged under federal Law, an adversary proceeding against the creditor may be filed in the United States Bankruptcy Court. The letter should also enclose a copy of the discharge order. The bankruptcy court has the power to hold the persistent creditor in contempt of court. The court also may fine the creditor.
