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Can Creditors Still Collect Debt That Was Wiped Out by Bankruptcy?

When you are overwhelmed by debt, bankruptcy can offer you a fresh start financially. Your debts are wiped out, and you can start over with a clean slate. Sometimes, though, creditors, debt collectors, and collection attorneys threaten these rights to a fresh start and try to collect on a debt that was wiped out by bankruptcy.

Many clients come to us full of worry, wondering, “Can creditors still collect a debt that was wiped out by bankruptcy?” Luckily, the answer is an emphatic no as long as the debt was of a type that could be discharged in a bankruptcy, such as credit cards, personal loans, and medical bills.

If your debts were discharged in either a Chapter 7 or Chapter 13 bankruptcy, you are free and clear of those debts forever. Whether you paid off some, or none, of the original debt is irrelevant. The bankruptcy has cleared the debt and you are no longer responsible for paying it.

In fact, it is illegal to try and collect on any debt that has been wiped out by bankruptcy, so any parties contacting you in an attempt to still collect are blatantly breaking the law, especially if they continue to harass you after being informed of the discharge. If this is happening to you, a Cleveland bankruptcy lawyer may be able to help stop the collection activity.

Protecting Your Right to a Fresh Start

Because such harassment is illegal, you have options for recourse against the collectors that continue to infringe on your right to a fresh start. First, you can get them to stop contacting you. After your bankruptcy becomes final, all creditors should be informed of the change, but some will often pretend to be oblivious to such information.

That’s why you should officially re-inform credits by sending a copy of the discharge order to creditors, return receipt requested and providing creditors who call with the case number, date of filing, and date of the discharge order.

If this does not stop the collection efforts, you can take harsher action. Talk to your bankruptcy lawyer about getting a court order from a judge against the creditors ordering them to stop contacting you and cease all collection efforts. This should allow you to move on with your fresh start.

In addition, the law provides you with the opportunity to be compensated for the harassment you suffered. You also may receive attorney fees and damages or sanctions from the debt collectors. Your Cleveland bankruptcy lawyer can build a legal strategy to help you collect what you deserve.

Contact a Cleveland Bankruptcy Lawyer

Your rights to a fresh start offered by bankruptcy are absolute. No discharged debt can be collected. Period. Of course, there are some debts that cannot be discharged in a bankruptcy, but you should be made aware of this long before your bankruptcy discharge is finalized.

If you are considering bankruptcy as an option to get your financial situation back on track, call a Cleveland bankruptcy lawyer at Luftman, Heck, & Associates today at (216) 586-6600 to find out how we may be able to help. We will help you clear your debts and start over, free and clear of the harassment of creditors.

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