Discharge is, for debtors, probably the climax of the bankruptcy process, given that it is the point at which the debtor is cleared of debts as a result of following the requirements of the bankruptcy process. Discharge is what allows debtors to be free from collection actions by creditors and to move on with their lives.
Unfortunately, discharge is not always the end of collection efforts. In some cases, debtors don’t honor the bankruptcy process and continue to attempt to collect on debts that have been discharged. When this happens, there are options for relief.
A federal bankruptcy court ruled earlier this month that a group of secured creditors including Wells Fargo was required to pay significant damages to a Chapter 7 debtor for failing to abide by a discharge order. The debtors–a couple who filed bankruptcy together–had apparently been harassed by the creditors for years, facing an illegal foreclosure action and receiving numerous collection letters concerning debt which was discharged in the bankruptcy case.
Wells Fargo, for its part, was behind the illegal foreclosure action, which was filed six years after the close of the case. The foreclosure was supposed to be aimed at mortgaged property, but instead targeted a portion of non-mortgaged property. The bank had apparently made a mistake in its records, but failed to respond to the debtors’ attempts to correct the errors and at least 15 different letters providing notice of bankruptcy and discharge.
The case is unfortunate, but at least the debtor was able to be compensated. When an individual continues to be harassed by creditors for discharged debts, it is important to understand the options for relief. Working with an experienced attorney helps ensure one’s legal rights are protected.