Mason, MI Bankruptcy Law Firms & Lawyers

No, a notice that the claim has been withdrawn indicates that the creditor does not intend to get paid through the bankruptcy. If the debt is secured, the creditor will be able to repo or foreclose on the property securing it after a discharge has been entered but cannot seek additional money from you as payment on the underlying debt. Only if the property is not eligible to be discharged, such as a tax debt, child support, or alimony, or the creditor successfully brings an adversary action, such as under 11 USC sec 523, will the creditor be able to collect from you personally. Withdrawing the poc has nothing to do with a debt being eligible to be discharged.

A bankruptcy discharge will indeed dispose of most judgments, rendering them uncollectible. There are some exceptions, such as judgments stemming from non-dischargeable debts, such as student loans, or domestic support obligations. However, most debts, such as those stemming from credit cards, deficiencies owed on auto loans, and medical debts will be discharged whether the debts have been reduced to a judgment or not. Any creditor that attempts to collect in any way on debts that have been discharged in bankruptcy even if they have a judgment from a state or Federal Court is in violation of a Federal Court order and will be in contempt of the order and subject to sanctions. Moreover, the Massachusetts Consumer Protection Act bars the attempted collection of debts where no right to collect exists. Accordingly, a creditor attempting to collect a discharged debt is in violation of Massachusetts law, leaving the violating creditor potentially open to payment of up to triple the plaintiff's (i.e., the Debtor's) actual damages and the plaintiff's attorneys fees.

I would advise that she consider filing a motion to amend their chapter 13 plan. Since there has been a change in financial status and bills, there may be a need to reduce the monthly payment to the bankruptcy plan. That is provided there is still enough to cover priority (secured) creditors.