Common Creditor Violations of the Discharge Injunction

These are the most frequently reported ways creditors ignore the Section 524 discharge injunction.

Collection Calls and Letters

The most common violation is simple: a creditor calls or sends a letter demanding payment on a debt that was discharged. This includes calls from the original creditor, debt buyers who purchased the debt, and collection agencies. Any demand for payment on a discharged debt violates Section 524(a)(2).

Credit Report Misreporting

Creditors who continue to report a discharged debt as having a balance, as delinquent, or as in collections are violating the discharge injunction. Discharged debts should be reported with a $0 balance and marked as "included in bankruptcy" or "discharged in bankruptcy."

If you see incorrect reporting, dispute it with the credit bureaus first. If the creditor continues to report incorrectly after notice, that strengthens a contempt claim. See credit reporting.

Filing Lawsuits on Discharged Debts

Some creditors file lawsuits to collect debts that were discharged in bankruptcy. This is a clear violation of the discharge injunction and a serious abuse. If you are served with a lawsuit on a discharged debt, respond immediately -- provide the court with a copy of your discharge order and file a motion for contempt in the bankruptcy court.

Wage Garnishment

Any attempt to garnish wages for a discharged debt is a violation. If your employer receives a garnishment order for a discharged debt, notify your employer of the discharge and contact the bankruptcy court.

Offset or Setoff

A creditor who holds your bank account or owes you money may attempt to offset that amount against a discharged debt. For example, a bank where you have a checking account may freeze or reduce your balance to recover a discharged credit card debt. This is generally a violation of the discharge injunction, though there are limited exceptions for pre-petition setoff rights.

Threatening or Coercive Conduct

Any threat -- even an implied one -- to take action on a discharged debt violates the injunction. This includes statements like "we may need to report this to your employer" or "this could affect your ability to rent an apartment" when referring to discharged debts.

What to Do

1. Document every violation with dates, times, and details
2. Send a written cease-and-desist letter with a copy of your discharge order
3. If violations continue, report the creditor and consider filing a contempt motion

Cross-References

• dischargeinjunction.com -- Section 524 explained
• dischargeinjunction.org
• automaticstay.org -- The automatic stay during your case