One of the major complaints about having debt (besides having it in the first place) is the strategies and tactics that creditors and collectors employ to try and get the in-debt party to pay up. Many years ago, this could range from constant phone calls at odd times; threatening tones from debt collectors; debt collectors who pose as lawyers or police officers; and numerous other heinous forms of harassment to force the in-debt party to pay. It didn’t matter if the debt was legitimate or not because the whole point of these tactics is to wear down the individual so that they pay anyway.
The Fair Debt Collection Practices Act has curbed many of these tactics, if not eliminated them. But there are still collectors out there who take an illegal approach to collecting that debt.
For example, say you file for Chapter 7 bankruptcy and a number of past debts are discharged. Discharged debt means you are no longer obligated to pay it. Granted, this usually happens in tandem with asset liquidation, but that isn’t necessarily guaranteed.
Debt collectors may still call, even after a bankruptcy judge’s decree on the discharged debt, to try and collect that debt from the insolvent party.
As it turns out, Bank of America (BOA) has not been compliant in this regard. A bankruptcy judge recently ordered that the company be fined $10,000 for every month they do not comply with discharged debt orders. There have been multiple cases recently where BOA has harassed people over debts that were discharged in Chapter 7 bankruptcy; and the judge wants to “send a message” to banks everywhere that this kind of behavior is unacceptable.
Source: Wall Street Journal, “Bankruptcy Judge Sends a Message to Bank of America,” Peg Brickley, Oct. 4, 2013