The Discharge Injunction
When a bankruptcy case concludes with a discharge, the court issues a permanent injunction under 11 U.S.C. 524 that prohibits any creditor from ever attempting to collect the discharged debts. This is not a suggestion -- it is a federal court order backed by the contempt power of the bankruptcy court. Any attempt to collect on discharged debt, whether by the original creditor or a debt buyer who later purchases the account, violates this injunction.
The discharge injunction is one of the most powerful consumer protections in American law. It does not expire, it cannot be waived, and it survives the sale or transfer of the debt to any subsequent holder. Learn more about this protection at 524injunction.com.
Why Debt Buyers Target Discharged Debt
Debt buyers frequently purchase portfolios that contain accounts that were discharged in bankruptcy. This happens because the original creditor's records may not reflect the discharge, the debt was sold before the discharge was entered, or the debt buyer simply failed to check bankruptcy records before beginning collection.
Some debt buyers knowingly collect on discharged debt, counting on the fact that most consumers do not remember the details of their bankruptcy case from years or decades ago. A consumer who went through bankruptcy 15 years ago may not immediately recognize that a collection call relates to a debt that was already eliminated.
What to Do If Contacted About Discharged Debt
- Locate your bankruptcy discharge order (check your records, PACER, or call the bankruptcy court clerk)
- Send the collector a copy of the discharge order by certified mail with a letter demanding they cease all activity
- Document every contact -- dates, times, what was said, who called
- If collection continues after they receive the discharge order, contact a bankruptcy attorney
- File a motion for contempt in the bankruptcy court that issued your discharge
- File a complaint with the CFPB and your state attorney general
Remedies for Discharge Violations
Courts take discharge injunction violations seriously. Remedies can include compensatory damages for actual harm (emotional distress, lost wages, credit damage), attorney fees, costs of bringing the contempt motion, and punitive damages in egregious cases. Some courts have awarded damages in the thousands or tens of thousands of dollars for willful discharge violations.
You may also have parallel claims under the FDCPA, which provides for statutory damages of up to $1,000 per lawsuit plus actual damages and attorney fees. In some cases, consumers pursue both contempt and FDCPA claims simultaneously.
Frequently Asked Questions
What happens if a collector tries to collect a discharged debt?
Collecting on a discharged debt violates the federal discharge injunction under 11 U.S.C. 524. The collector can be held in contempt of court and ordered to pay damages, attorney fees, and potentially punitive damages.
How do I prove a debt was discharged in bankruptcy?
Your bankruptcy discharge order lists the case number and date of discharge. You can obtain a copy from PACER or by contacting the bankruptcy court clerk.
Can a debt buyer know if a debt was discharged?
Debt buyers are supposed to scrub their portfolios against bankruptcy records before attempting collection. However, many fail to do so, especially with very old debt.
What should I do if contacted about a discharged debt?
Send the collector a copy of your discharge order by certified mail and demand they cease all collection activity. If they continue, file a motion for contempt in the bankruptcy court.
Check your bankruptcy discharge eligibility with our free screening tool.
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