Can My Mortgage Lender Continue to Harass Me After Bankruptcy?

Bankruptcy is designed to provide a “fresh start” to Florida residents who are drowning in debt. After completing the Chapter 7 bankruptcy process, for example, the court typically issues a discharge that prevents a person’s creditors from taking any further efforts to collect an outstanding debt. But some creditors may ignore or otherwise attempt to circumvent the bankruptcy discharge. This is illegal and Florida debtors have legal recourse to punish and deter such activities.

Judge Declines to Dismiss Lawsuit Over Mortgage Statements Sent “In Error”

Here is an illustration from an ongoing Florida case. A woman filed a Chapter 7 bankruptcy petition several years ago. Among her debts was a home mortgage with an outstanding balance of approximately $185,000. The woman completed the bankruptcy process and received a discharge of her debts—including the mortgage—several months later.

Nearly five years had elapsed when the woman received a mortgage statement from a company that had taken over the loan from the original lender. The statement claimed the woman owed a payment of more than $72,000. In response, the woman filed a complaint with the bankruptcy court, claiming this was an illegal collection action barred by her bankruptcy discharge.

The parties ostensibly settled the case out of court. But the company’s harassment apparently did not end there. The woman said she continued to receive “informational statements” noting her outstanding balance on the mortgage. The company claimed these statements were sent “in error,” yet it continued to send them even after the woman complained. Finally, the woman filed a second lawsuit, this time alleging violations of the Fair Debt Collection Practices Act and the Florida Consumer Collection Practices Act. Both of these laws prevent any debt collector from attempting to enforce a debt that it knows “is not legitimate.”

In a July 28 opinion, a federal judge in Fort Myers refused to dismiss the woman’s complaint. The company argued it did not violate the law because its “informational statements” contained disclaimers that the documents were not “an attempt to collect a debt.” The judge noted, “Fine print and one-sentence disclaimers, like that here, have generally been found to be insufficient to shield creditors from liability.” Indeed, at this stage a plaintiff need only allege facts that would make it plausible “that the least sophisticated consumer would construe the statements here as attempts to collect on the mortgage debt.” It is important to emphasize, however, that the judge’s decision only applies to the defendant’s motion to dismiss the case—she did not rule on the merits of the underlying lawsuit.

A Miami Chapter 7 Bankruptcy Lawyer Can Help

Regardless of how this particular case turns out, it demonstrates how Florida consumers can and should assert their post-bankruptcy right to be free from creditor harassment. Bankruptcy is designed to protect and shield debtors from their past debts. If you have questions about how bankruptcy works and how it can help you deal with your creditors, you should speak with a qualified Miami bankruptcy attorney as soon as possible. Contact the Law Office of Julia Kefalinos, P.A., if you need immediate assistance.