Enforcing a Bankruptcy Discharge Order

Day 736 / 365 - Ski holiday Ouch ( credit crunch debts bills )

So your bankruptcy is over and you have your discharge order, but there is a creditor that just won’t leave you alone.  What happens now?  You need to go back to court to enforce the discharge order.

In the recent case of Barrientos v. Wells Fargo Bank, the 9th Circuit Court of Appeals ruled that debtors do not have a private right to sue for violations of the bankruptcy discharge order.  Instead, the debtor must file a motion requesting the court to hold the creditor in contempt.  Some courts require the debtor to file an application for order to show cause regarding contempt.  NOTE:  The 9th Circuit only covers the states of Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington as well as the territories of Guam and the Northern Mariana Islands.

The first step would be to file a motion to reopen the bankruptcy case if your case has been closed.  Once the case is reopened, then the debtor can file the motion for contempt under Section 105 of the Bankruptcy Code.  In the Southern District of California, the usual procedure is to file an ex parte application for an order to show cause requesting the court to order the part violating the discharge order to show cause why the creditor should not be sanctioned by the court.  If granted, the court will schedule a hearing dating and a briefing schedule for the filing of legal arguments in the case.

If the court finds the creditor in contempt for willfully violating the discharge order, the judge has broad discretion to award remedial sanctions.  Possible sanctions include reimbursement of legal fees, the return of money illegally collected by creditor, expenses incurred protecting the discharge order and possibly even emotional distress damages.

We generally handle discharge violations on a contingent fee basis for debtors.  If you are in the San Diego area and are being harassed by a creditor over a discharged debt, please call me at (619) 448-2129 for a free consultation.

Photo credit: xJasonRogersx

Carl Starrett

Carl Starrett is a consumer bankruptcy attorney in San Diego, California helping debtors file for protection under Chapter 13 and Chapter 7 of the Bankruptcy Code.

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