What to Know About Student Loan Companies Trying to Collect Discharged Debt

Are some student loan companies attempting to collect debt that has been discharged in consumer bankruptcy cases? According to a recent article in Business Insider, the Consumer Financial Protection Bureau (CFPB) reported that “student loan companies have been accused of violating discharge orders and unlawfully collecting debt,” which should put consumers on alert if they have received a debt discharge through bankruptcy. To be clear, discharged debt is not owed, and creditors cannot attempt to collect it. What else do you need to know? Our Oak Park bankruptcy lawyers have information to help.

Learning More About Student Loan Companies Attempting to Collect Discharged Debt

The recent report from the CFPB underscored that student loan debt can in fact be discharged in bankruptcy despite the frequently repeated misconception that student loan debt cannot be discharged. To be clear, while student loan debt can be more difficult to discharge than some other types of consumer debt, it can indeed be discharged in a bankruptcy case. Yet even when consumers are able to have student loan debt discharged through bankruptcy, some are still being approached by creditors, and some have even made payments on the debt that was discharged.

The CFPB has indicated that it has plans to hold student loan companies accountable for violating U.S. bankruptcy law. CFPB Director Rohit Chopra has indicated that has “directed CFPB staff to closely scrutinize these issues, including whether companies are making false representations” to collect debt or discourage student loan holders from attempting to have those debts discharged through bankruptcy.

Can Other Creditors or Debt Collectors Try to Collect on Discharged Debt?

You might be wondering if creditors can try to collect on other types of debt after you have received a bankruptcy discharge. As the Consumer Financial Protection Bureau (CFPB) emphasizes, “debt collectors cannot try to collect on debts that were discharged in bankruptcy,” no matter what the type of debt or who the creditor might be. If you have had a debt discharged as part of a Chapter 7 or Chapter 13 bankruptcy case (or Chapter 11 in some circumstances for individual debtors), it is important to know that the creditor is violating U.S. bankruptcy law through a bankruptcy discharge violation.

While a creditor might say that they did not have information about your bankruptcy, or try to scare you or threaten you into making payments on debts that have been discharged, you have rights as a consumer. Not only could the debt collector be violating the U.S. Bankruptcy Code, but the debtor may also be violating the Fair Debt Collection Practices Act (FDCPA) or other applicable U.S. laws. You should seek advice from a bankruptcy attorney if you have any questions.


See Related Blog Posts:

Things to Know About Student Loans and Consumer Bankruptcy

Consumers Who Own Small Businesses and Want to File for Bankruptcy


Contact Our Oak Park Bankruptcy and Consumer Protection Lawyers Today
Do you need assistance with questions concerning a bankruptcy discharge, or do you need help dealing with a debt collector following a bankruptcy discharge? It is important to talk with an experienced Oak Park bankruptcy attorney about your circumstances. Contact the Emerson Law Firm today to learn more about how we can help you.

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