When you receive your bankruptcy discharge, you are legally excused from responsibility for any debts that have been discharged.

Unfortunately, some unscrupulous creditors count on people filing bankruptcy not knowing how far their protection extends and attempt to collect on debts after the court has excused them.

Don’t Pay What You Don’t Owe

The fresh start granted to you by the court protects you from the following.

• Mail contact from creditors: Letters indicating that payment is due are prohibited; if you receive any, show them to your attorney.
• Phone calls from creditors: Again, you have no obligation to pay discharged debts. Contact from creditors asking you to do so is forbidden. Record the time and date of any such calls.
• Lawsuits from creditors: Because you no longer owe money on discharged debts, creditors have no legal recourse to collect them.
• Failure to update your credit report: Creditors that threaten to continue reporting a discharged debt as unpaid to scare you into paying it are breaking the law. Be sure to check your credit report for accuracy and note any wrong information you see.

Why Creditors Attempt Collection

Put simply, creditors stand to make money by attempting to collect on debts you don’t owe.

If you pay them, they get cash they otherwise wouldn’t have.

In some cases, the people or groups attempting to collect aren’t even your original creditors! Here’s why:

• Say you owed one credit card company $1,000, but the debt was discharged in bankruptcy. You now owe the company $0, which is how much they can legally collect from you.
• A third party collector may offer to buy your debt from the credit card company for, say, $10 for the privilege of “owning” the discharged debt. The credit card company may agree, since $10 is more than $0, so they technically make a profit.
• The collector can then hound you about paying the debt, even though you no longer have any legal obligation to do so. If you end up paying, they make $990. If not, they only lose $10.
• Because enough bankruptcy filers are unaware that they don’t have to pay these debts (or feel somehow guilty about not having paid them), many pay. This makes the illegal debt collection profitable even when some people refuse to pay.

Contact a Bankruptcy Lawyer

If any of your creditors tries to collect on this “zombie debt,” you have the right to contact a bankruptcy lawyer.

You have rights and can take action to protect them – that’s what the fresh start is all about!