On behalf of Law Offices of Mark M. Kratter, LLC on December 29, 2011
Bankruptcy is something most people don't take lightly. It is often used as a last resort to regain financial stability and get a start fresh. In the last fiscal year, approximately 1.4 million people filed for either Chapter 7 or Chapter 13 personal bankruptcy in an effort to stop creditor harassment and move forward from their past debts.
The protection given through bankruptcy means creditors cannot come after people for debt that has been discharged by a bankruptcy judge. Sadly, this hasn't stopped one bank from allegedly harassing thousands of people for their past debts.
A report by a court auditor found that Capital One tried to collect on 15,500 "erroneous claims" from past customers. The auditor says the company went after debt that had previously been erased through bankruptcy, therefore making it unavailable for collection by the creditors.
Going after discharged debt is an illegal practice that some banks use to try to collect money after someone is granted personal bankruptcy protection. Although this practice is illegal, companies who successfully collect forgiven debt from a small percentage of the thousands of people they seek money from, will see a payoff.
Capital One is now being sued by 800 people for allegedly trying to illegally collect forgiven money, which they deny was ever done on purpose. The bank says that if it was pursuing someone who had filed bankruptcy, it was because the company wasn't informed of the bankruptcy.
An experienced bankruptcy can help you deflect creditor harassment, file for bankruptcy protection and prevent illegal harassment after the bankruptcy has been granted.
Source: The Washington Post, "Debts Go Bad, Then It Gets Worse," Jessica Silver-Greenberg, Dec. 23, 2011
