My credit card company is still billing me after my bankruptcy. Can it do this?

In most situations, a credit card company cannot send billing statements to you after your bankruptcy.

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Question

I field for Chapter 7 bankruptcy last year. I had a credit card debt plus some other debts. I completed the bankruptcy and got the discharge. But my credit card company just started sending me bills again. I haven't charged anything since before the bankruptcy case. In fact, I cut up the credit card. Can the credit card company do this?

Answer

Most likely not. There are a few situations where a credit card company can continue to bill you after you file for bankruptcy. But in most cases, a credit card company is not supposed to bill you after your bankruptcy. If it does, it violates the bankruptcy discharge injunction and may violate state and federal fair debt collection statutes.

The Automatic Stay Prohibits Collection Actions During Bankruptcy

In most cases, when you file for bankruptcy, a temporary stop to collection goes into effect. This is called the automatic stay and it prohibits most creditors from taking action to collect a debt from you while your bankruptcy case is pending.

But if you have filed for bankruptcy more than once within the last year, the automatic stay may be limited, or in the case of three or more filings, may not apply at all. (To learn more see, Losing the Automatic Stay for Repeat Bankruptcy Filings.)

After Your Debts Are Discharged

Once you receive a discharge, the automatic stay doesn’t apply to you or the property that you were able to exempt in the bankruptcy. Instead, it is replaced by the discharge injunction (an injunction is a court order prohibiting someone from doing something). Your discharge prohibits creditors from taking any action after bankruptcy to collect a debt that has been discharged. In most cases, credit card debt is discharged.

When Credit Card Creditors Can Send Statements after Bankruptcy

The only time a creditor can send you billing statements during or after bankruptcy is if the automatic stay did not apply in the first place or the debt was not discharged in the bankruptcy. Here's when that might happen.

Post-petition charges. If you used your credit card after you filed, the creditor is not prohibited from billing you for debt that you incurred after you filed for bankruptcy because that debt is generally not discharged.

Multiple bankruptcies within the last year. If you filed more than one bankruptcy within the last year, the automatic stay may be limited or may not go into effect at all. In this case, the creditor can continue to send statements until you receive a discharge.

The court has denied your discharge. If the court denies your discharge generally or determines that the debt to that particular creditor is not discharged, the creditors affected may send you statements after bankruptcy.

You used the credit card to pay taxes which would not have been discharged. Credit card debt incurred to pay non-dischargeable taxes is not discharged in bankruptcy.

You reaffirmed the debt during the bankruptcy. This is more common in for car loans but there may be instances where you might reaffirm a credit card debt. Some store cards, particularly for furniture, electronic and appliance stores, require you to sign an agreement which pledges the property purchased as security for the loan. Under these circumstances, you may need to reaffirm the debt if you want to keep the property you charged on the card. (Learn what it means to reaffirm debt during bankruptcy.)

Penalties for Violating the Automatic Stay or the Discharge Injunction

If a credit card company violates the automatic stay of the discharge injunction, the bankruptcy court can impose stiff penalties. The bankruptcy court may require that the company pay:

  • damages for any costs or fees you incurred, and
  • punitive damages designed to deter the company from violating the discharge injunction in the future.

Violations of the discharge injunction may also violate state and federal fair debt collection laws.

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