Lawsuit filed after BK Help

You not only have a violation of the bk stay but FDCPA violations. Here's a recent appeals case.


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Attempting to Collect Debt Discharged in Bankruptcy May Violate FDCPA

Description Court refused to dismiss a suit brought by a debtor whose debts had been discharged in bankruptcy. A bank bought a discharged debt and attempted to collect the debt. That may be a violation of both the Fair Debt Collection Practices Act and the Bankruptcy Code.

Topic Consumer Protection
Key Words Fair Debt Collection Practices Act; Bankruptcy; Discharged Debt
C A S E S U M M A R Y
Facts Wagner filed Chapter 7 bankruptcy and received a discharge of her debts in 1997. Among the debts discharged was a note secured by a mortgage of real property. After the discharge, the note and mortgage were assigned to Ocwen, which is in the business of buying and collecting defaulted debts. Ocwen attempted to collect the discharged debt from Wagner. She sued, claiming violation of the Fair Debt Collection Practices Act for attempting to collect money from her that she did not owe. Ocwen moved to have the claim dismissed, contending that her only remedy would be under the Bankruptcy Code.
Decision Motion denied. Since Wagner's debts had been discharged, she was not a debtor to Ocwen, who attempted to collect money from her. Ocwen's claim that only the Bankruptcy Code, but not the Fair Debt Collection Practices Act, could apply is incorrect. Both laws can be violated at the same time. Ocwen could be found in contempt of the Bankruptcy Code and in violation of the FDCPA. "Wagner's FDCPA claim, at its foundation, is no different from that of any other debtor who is dunned by a creditor who in fact is not owed any money; the fact that her debt was discharged in bankruptcy does not logically differentiate her case from that of a debtor whose debt was discharged in some other way."
Citation Wagner v. Ocwen Federal Bank, FSB, 2000 WL 1382222 (N.D. Ill., 2000)

 

Hi,

Here is a warning: DO NOT SKIP COURT UNDER ANY CIRCUMSTANCES!!

Once you are served papers, if you do not appear in court, the plaintiff (CA) may win a default judgment. It will then be a major PITA to get such a judgment vacated.

The CA may try to contact you by phone or in writing, saying that if you do such and such you need not appear in court -- for example, saying 'send the discharge papers and we will consider the matter closed" -- DO NOT BELIEVE THEM. They are known to lie.

Go to the court, and present copies of your discharge papers as proof of non-existence of the debt. The case should get dismissed.

Then go and counter-sue the CA for violating your rights and FDCPA, and win damages. Courts tend to take a dimview of someone attempting to collect a debt contrary to, and in contempt of, bankruptcy court decisions.

As I see it, you have an open-and-shut case.

One final warning: present only copies of your discharge papers; not the original documents. A creditnetter "greenvan" recently posted here that he submitted original documents to a judge, and never got them back ... they get tagged as "evidence" and become part of court record.

 

Also read Turner v J.V.D.B., you can find it HERE.

Synopsis:

Fair Debt Collection Practices Act
Seventh Circuit

Is knowledge of debtorâ??s bankruptcy an element of violation of FDCPA?

The debtor sued a debt collector, alleging that the collector violated §§ 1692e and 1692f of the Fair Debt Collection Practices Act (FDCPA) by attempting to collect a debt that had been discharged in bankruptcy. The debt collector alleged no knowledge of the discharge in bankruptcy. The Seventh Circuit held that the Fair Debt Collection Practices Act that prohibits debt collector from engaging in any â??false, deceptive or misleadingâ? collection activities and, specifically, from making a â??false representationâ? of â??legal status of any debt,â? applies even when debt collectorâ??s false representation is unintentional. Consumer Credit Protection Act, § 807, 807(2)(A), as amended, 15 U.S.C.A. § 1692e, 1692e(2)(A), § 1692f. Turner v. J.V.D.B. & Associates, Inc.,330 F.3d 991 (7th Cir. 2003).

According to the Court, the weight of authority applies an objective test to determine liability under § 1692f. The test does not hinge on the defendantâ??s knowledge, but rather upon how a consumer would perceive the demand letter. These authorities endorse the proposition that the collectorâ??s knowledge is not a condition for violating § 1692f; rather, they hold that the existence of a violation hinges on objective factors that relate to a consumer who receives the demand for payment.

The Court held that although a jury is entitled to find that this notice violated § 1692e insofar as it falsely implied that the debtor had to pay a debt discharged in bankruptcy, it would not logically follow for the Court to hold that, whenever a debt collector unlawfully attempts to collect a debt that is discharged in bankruptcy, or is otherwise unenforceable, its mere provision of the information mandated by § 1692g(a) automatically creates further liability under § 1692f. In other words, the Court held that a letter simply providing the information required by § 1692g(a) is not an unfair or unconscionable means of debt collection under § 1692f, even when the debt collector may have violated some other provision of the FDCPA. The Court upheld the summary judgment in favor of the debt collector.


Gib