We are still receiving statements from a CA (OC: local hospital) a year and a half after our chapter 7 discharge. I have called them and written them (both the OC and the CA) and advised them that the debt was included in the petition and is no longer collectible. I've given up and am now drafting a demand letter. My question is should I cite the automatic stay violation 18 U.S.C. § 362(a)(6) as well as the post discharge injunction 11 USC 524? Or would one have a bigger effect than the other? TIA
During an active bankruptcy case (from the moment you file until the discharge is granted) the debts still exist, however you are protected from any and all collection action by the automatic stay. For certain kinds of debts, the creditor may choose to file for relief from the stay, such as to foreclose or reposess collateral. Other kinds of debts will survive the bankruptcy, however medical debts do not fall in this category. After the discharge is granted and the case is closed, the automatic stay ends, as the debts that are dischargeable no longer exist and are not collectible. The discharge order creates a permanent injunction blocking the creditors from ever contacting you or attempting any collection actions for the discharged debts. As your case is discharged and closed, you need to refer to the automatic discharge in the warning letters to the overzealous collection agencies. Send the letter--with a copy of your discharge order--certified mail return receipt requested so you have proof they got it. If the contact doesn't stop in a reasonable timeframe (a week or two after proof of delivery) then you can sue for violations. Each contact is a separate violation, so you can probably find an attorney willing to take the case on contingency if the CA keeps calling.
Thank you very much for the clarification. They have been a constant thorn in my side for the last 3 years so I wasn't sure which way to go. Post discharge injunction 11 USC 524 it is. Curious though, my previous communications with them, plus the fact that they are on the schedule F and were notified of the petition/341 meeting is not enough "proof" that this is no longer collectible? Seems they should be aware by now without me needing to send the discharge order. Thanks again!
Sure, we both understand that if the collection agency was on your creditor matrix, they must have already received notification of the discharge. However, in order to successfully sue for damages, you need to eliminate the "I didn't know/I was never notified" defense, and allow a reasonable amount of time for compliance. Therefore, send the letter requesting the CA to cease all further contact and collection activity (including credit reporting of the alleged debt) and refer to the permanent injunction granted by your BK discharge. Enclose a copy of the discharge order, and send it certified mail return receipt requested. Then wait 1 to 2 weeks after the green card comes back showing proof of delivery and begin to document EVERY violation. Save any and all dunning letters which they may send after this point, print out a copy of your credit report(s) if the debt is being reported improperly, and obtain a tape recorder and record each individual collection call that is made after this point. If necessary, request printed phone records from your telephone provider, which can be used to document incoming calls from the CA. We both understand that the collection activity probably won't stop due to sending the letter, however that's ok. Each individual collection attempt is a violation in and of itself, and for more eggregious violations post-BK, the judge can award even more than the $1000 statutory damages that are available under the FDCPA. Also, if the collection agency reports the debt on your credit report(s) with anything other than a zero balance due and "included in bankruptcy" notation, that in and of itself constitutes a "collection attempt" and is therefore a violation of the discharge injunction!
The key here is to not treat each contact as a nuisance, but an opportunity to collect from the collection agency. A blessing instead of a curse, as it were. In any communication with the CA, I would say the absolute minimum necessary to get your point across., e.g. Account #nnnnn was included in the bankruptcy (docket #xxxx in yyyy court) and discharged on <date>. I'm not sure I'd tell them to cease and desist. If a collection agency (whose business is to navigate these waters on a daily basis) doesn't know what that sentence means then they deserve every consequence that comes their way. (IMO, it would be like a commercial pilot who doesn't know what "cleared to land" means). I don't know if I'd include any copies of anything, either. Why do their job for them? They can look it up on line if they don't believe you. Let them pay for the .10/page download fee. You do need to send the letter and get the green card back. But, after you get the green card, just start taking notes and collecting evidence to go to court when you think you've got enough violations to make it worth your while.
