There were a host of cases over the past couple years that discuss the discharge injunction. The discharge injunction is permament and is authorized by section 524(a)(2) of the Bankruptcy Code. It "operates as an injunction against... an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived...." 11 USC § 524. As the Eastern District of Pennsylvania state in In re Meyers in 2006, Section 524(a) is a broad injunction power which effectively bars creditors from collecting debts as personal liabilities from a discharged debtor." It eliminates a debt permanently (not liens) and gives people the "fresh start" they desire.
In re Brown of the Western District of Pennsylvania, found that a mortgage company did not violate the discharge injunction by sending a "generic informational letters and notices" that contained no request for money. Another Western District case In re Englert involved a case where the debtor re-opened their case to file an adversary action against Ocwen mortgage company. Ocwen was tremendously non-compliant with the process (failed to respond to Interrogatories, their attorney failed to appear at the status hearing). The Court ruled that the debtor's only remedy for a violation of the discharge injunction was a civil contempt proceeding via 11 U.S.C.§ 105. They had to prove the contempt through:
- a valid order existed (like a discharge order)
- the person accused of contempt knew of the order and
- the person accused of contempt disobeyed the order.
The court ruled that it would not hold Ocwen in contempt as there was doubt that they were trying to collect a pre-petition debt. They Court did hit Ocwen for failing to comply with th Discovery Order and sanctions were ordered.
Here's the general rule -- if you receive a debt collection after your bankruptcy and it is for a pre-petition debt, contact your Chester County bankruptcy lawyer to make sure there has not been a violation of the discharge injunction.