A bankruptcy discharge releases the debtor from liability for debts that were included in the bankruptcy. A discharge permanently prevents creditors from attempting to collect any portion of the discharged debts, including using collection letters, collection phone calls, filing a lawsuit, or any other communications with the debtor.
Although the bankruptcy discharge releases debtors from personal liability for debts, many collection agencies, banks, finance companies, or other creditors continue to try to collect those amounts even though the debt is extinguished.
The bankruptcy discharge constitutes a permanent statutory injunction prohibiting creditors from taking any action, including the filing of a lawsuit, designed to collect a discharged debt.
Common violators of discharge orders are:
If a creditor or collection agency attempts collection efforts on a discharged debt, the debtor has a variety of legal remedies. Collection attempts of discharged debt may constitute a violation of the North Carolina Debt Collection Act, North Carolina Collection Agency Act, or the Fair Debt Collection Practices Act. These statutory provisions allow for statutory penalties in addition to attorneys fees and costs.
Collection agencies or creditors determined to have violated the North Carolina Debt Collection Act and the North Carolina Collection Agency Act can be assessed statutory penalties ranging from $500 to $4,000 per violation.