What Happens After Bankruptcy?

A bankruptcy discharge is a powerful event because it releases the individual who filed for bankruptcy from liability for certain debts. The discharge is essentially a legal order prohibiting creditors from making any future collection efforts, and it ultimately has the power to make life after bankruptcy much easier for those who have filed. But what about creditors who fail to honor the bankruptcy discharge? Most times this type of violation is referred to as creditor harassment after bankruptcy, and it can really get in the way of the relief that bankruptcy is supposed to provide. Fortunately, creditor harassment laws are in place to protect people from precisely this type of harassment.

A bankruptcy discharge should stop creditors from continuing or bringing any new action against the person who received the discharge. Generally, this means that creditors cannot collect or recover certain debts, nor can they offset a discharged debt from the individual’s property. Moreover, once a bankruptcy is discharged, creditors are prohibited from harassing or threatening individuals, and also from selling a discharged debt to another collection agency. Many creditors ignore these broad prohibitions, however, and effectively violate the bankruptcy discharge. And, when this happens, victims of the discharge violation may have legal recourse.