T. Stagg

Thomas Stagg of simmons jannace stagg, just
got a ruling from the US Bankruptcy Court in NY which will clarify a credit card company's duty to consumers. This is very important to the creditors and the debtors - it deals with "discharge violation". They are claims that are asserted by debtors against the creditors after their discharge in bankruptcy.

Until now no one knew where a creditor had to take the necessary steps that follow a debtor's discharge to let the credit reporting agancy know that the pre-petition report of a delinquent account ended in bandruptcy.

There was a ruling in "In re Bruno, __ B.R. __, 2006 WL 3086307 (Bankr. W.D.N.Y. Oct 31, 2006)." This ruling states that the creditor doesn't violate the discharge injunction in 11 U.S.C. § 524 just because it hasn't been reported an account as ended in bankruptcy.

Not many courts have ruled on this. Simmons, Jannace & Stagg in a case similar to this . Simmons, Jannace & Stagg showed the court that no time after filing the petition did the credit card company talk with the debtor or make a positive attempt to collect the debt. After discharge, the debtor found out that credit report didn't show that the credit card debt had been discharged in bankruptcy. Therefore, he filed suit against the credit card company because the company violated § 524's discharge injunction. Because they didn't update his account to correctly show that it was discharged in bankruptcy, thus claiming that he was denied that so called "fresh start" that he was duly entitled for following his discharge.

The court agreed with Simmons, Jannace & Stagg and agreed that § 524 didn't need a credit card company to take added steps to show that an account was discharged in bankruptcy. Finally the decision made it clear that § 524 is not the best "remedy" for such debtors.