Post-Bankruptcy Credit Reporting Violates The Discharge Injunction - Florida Agrees
May 21, 2008
Continuing to report a discharged debt as due and outstanding after bankruptcy is a violation of the US Bankruptcy Code, says the U.S. Bankruptcy Court for the Middle District of Florida.
The case? In re Fox, 3:05-bk-12267 (Bankr. M.D.Fl). Here, the court relied heavily on two of my cases, Russell v Chase Bank USA, NA (In re Russell), 378 BR 735 (Bankr. EDNY 2007) and Torres v. Chase Bank USA, NA (In re Torres), 367 BR 478 (Bankr. SDNY 2007), for the propositions that
[w]hen a creditor falsely reports unpaid balances which are stayed or discharged by a bankruptcy, it impermissibly attempts to collect that debt in violation of the automatic stay . . . and the discharge injunction . . .
The case involved a prepetition debt due to Navy Federal Credit Union. I am glad to see that the Court chose to follow the sound logic of the Torres and Russell courts, though it always concerns me when I see a new case come out on this topic.
Sadly, many attorneys fail to set up their facts properly and provide the creditor with an opportunity to correct the offending tradeline. Thankfully, a very competent and well-reasoned attorney was in control of this case.
I will be speaking at a CLE on this subject in the near future, so please stay tuned for more information.
The decision can be accessed here.
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