The Bankruptcy Case
Joe Debtor files for chapter 7 bankruptcy. He lists credit card company “Easy Credit” as a creditor holding a claim for $12,000.
Four months later, Joe receives notice of the discharge of his debt. Easy Credit’s claim is wiped out in Joe Debtor’s bankruptcy case. Joe’s been released, or discharged from any future liability on the debt to Easy Credit.
Joe Debtor’s New Credit Card Application
Anxious to restore his credit rating, Joe Debtor applies for a new credit card from Easy Credit, and other credit card companies.
Joe Debtor knows he may have to pay higher fees and interest for a new card because he filed for bankruptcy.
But Joe Debtor also knows he can restore his credit score by paying the card balance in full each month.
The Credit Card Company Violates the Discharge Injunction
Easy Credit denies Joe Debtor’s application, which is understandable. Easy Credit also sues Joe Debtor for payment of the balance on Joe Debtor’s credit card, that is the same debt Joe Debtor listed on his schedules in his chapter 7 case.
Can Easy Credit sue Joe Debtor for a claim that was discharged in Joe’s prior chapter 7 case?
The answer is NO.
Joe is Protected and Can Take the Offensive
What can Joe Debtor do? Joe can sue Easy Credit for violation of the discharge injunction in Joe’s prior chapter 7 case and perhaps collect money for damages Joe Debtor suffers as the result of the violation.
If you think you could benefit from a bankruptcy discharge, shoot us an email for more details.
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