IIB accounts and what to do about them.

[Alex]

Question: What exactly are the legal grounds for dealing with the issue of the incorrect listings of Included In Bankruptcy (IIB) accounts { IIBAccounts }?

 

Let's say for example, that I have an account that was included in my bankruptcy and should be noted on my credit reports as such, but is listed as a "charge off".

 

Also, what about dates of status or dates of last activity, for the IIB accounts, than are different that the date the bankruptcy was filed?

[Feisty]

bump

Good question....MBNA is reportimg a charge off instead of IIB

[juliedealer]

http://library.lp.findlaw.com/articles/fil...trativelaw_2_12

 

you may have already seen this Erik, but this opinion letter addresses the "charged off" vs IIB issue.

[dixiedrifter]

I'd like to add somthing to juliedealer's post.

 

CRA's merely mirror what the OC's are reporting. Their data is only as good as what the OC furnishes.

 

Unless a consumer furnishes BK paperwork as evidence the TL is inaccurate, which we all know is a big no-no, the CRA can legitamately verify that an account is not IIB even though it actually was.

 

Bottom line is until the CRA gets proof, the burden of responsibility is on the funisher.

[owiebrain]

Question: What exactly are the legal grounds for dealing with the issue of the incorrect listings of Included In Bankruptcy (IIB) accounts?

 

BK code (title 11 of the USC), discharge orders, and FCRA. Let me find some Sassy links...

 

http://www.creditboards.com/phpBB2/viewtop...ert%2A+notif%2A

 

http://www.creditboards.com/phpBB2/viewtop...3551&highlight=

 

http://www.creditboards.com/phpBB2/viewtop...ya+manipulation

 

http://consumers.creditnet.com/straighttal...?threadid=33397

 

http://www.creditboards.com/phpBB2/viewtop...opic.php?t=8033

 

http://creditforum.org/showthread.php?s=&t...+and+discharged

 

http://consumers.creditnet.com/straighttal...cy&pagenumber=2

 

http://www.epic.org/privacy/publicrecords/

 

http://www.abiworld.org/abidata/online/law...ter02/Moss.html

 

Make sure to read the cases linked within sassy's posts!! I think Wehrheim (I'm sure I'm not remembering the name exactly but it's close) sums it all up.

 

 

Let's say for example, that I have an account that was included in my bankruptcy and should be noted on my credit reports as such, but is listed as a "charge off".

 

The two opinion letters, http://www.ftc.gov/os/statutes/fcra/lovern51.htm and http://www.ftc.gov/os/statutes/fcra/mccorkel.htm seem to work with each other, in my opinion. I take them, together, to mean that, if the account was charged off previous to BK, then it is okay to list it on your CR that way but, if it was not charged off until after BK was filed, then they should not list it as charged off. I think many others, though, read them to be contradictory. I've taken some time off to clear my head and need to go back now to re-read--who knows what I'll think this time.

 

Also, what about dates of status or dates of last activity, for the IIB accounts, than are different that the date the bankruptcy was filed?

 

I think that, if the delinquency was pre-BK, it should use the earlier date. However, if no delinquency pre-BK, then it's supposed to use the BK filing date. That's still on my list of research to do so I'm not sure.

 

Can't wait to read others' opinions on these issues!

[keb]

"Charged off" does not have the same implications for the debtor as "included in BK". Most specifically, a charge off is still an open liability that can be collected, an IIB account cannot be collected.

 

The most straightforward legal reason that they must list it as IIB is, then, that the information is not complete and accurate. It does not correctly reflect the status of the account. Pull up the text of the FCRA and search for the words "complete" and "incomplete". You'll see that the information provider is required to provide information that is "complete". It is neither complete nor accurate to fail to list the fact that the account is IIB.

 

The CRA is supposed to verify, and remove any information that is determined to be "incomplete". The problem comes when a creditor verifies incomplete information. I believe that the statute requires the CRA to delete regardless, if it knows or should know that the information is incomplete whether the creditor verifies or not, but that isn't laid out in so many words. The CRAs seem to get this at least in part, since they will clean up these accounts if you send in the BK paperwork whether the creditors verify or not.

 

The less straightforward reason would go like this:

 

1. A charge off that is not IIB is a collectible debt.

2. By listing the debt as a charge off, not IIB, the creditor is claiming that they have a right and an expectation of being paid.

3. They are consequently in violation of the automatic stay.

 

Consider what would happen if you applied for a house, for example. The lender would require you to remove the charge off from your CR. Either you would have to pay it, or you would have to get the creditor to list it as IIB. So they are listing it incorrectly and making an indirect collection effort by doing so.

 

What this issue really needs is for someone to have one of these incorrect listings on their report, apply for a house, and get the lender to write a demand letter that they pay off the "charge off" before getting the loan. I bet you could sue the rear off the creditor in that case. A couple of cases like this and these creditors might stop jerking people around this way.

 

I think this could be argued in court, but whether or not it would win would probably depend on the BK judge. I know of no case law that addresses this issue.

[crofttk]

...Unless a consumer furnishes BK paperwork as evidence the TL is inaccurate, which we all know is a big no-no, the CRA can legitamately verify that an account is not IIB even though it actually was.

 

Bottom line is until the CRA gets proof, the burden of responsibility is on the funisher.

Agreed. And that is what impales us on the horns of a dilemma !

 

So, here's my example:

 

1) Before I got hooked in here and knew any better, I sent my BK docs to all three CRAs and got all IIB accounts marked as "Included In BK/Never Late" and some other variations.

 

2) This allowed me to get home refinancing done, allowing me to provide factual explanations about BK and unjustified CO's still showing on our CR's to the mortgage underwriter.

 

3) Now, 5-6 months later, I have taken my first crack at disputing away IIB accounts as "not mine" (to challenge the "verifiability" of those derogatories -- which we had gotten to IIB ourselves) at EQ. This provides a test of which OC's were actually willing to support the IIB notation and which didn't care.

 

4) I disputed ALL IIB accounts of mine and DW's in early July. All of those disputed have been completed. Here are the results:

 

ME: 7 IIB's "not mine" - Outcome: 4 deletions, 2 remain - 1 showing as OPEN & 1 changing to CLOSED, 1 came back as Charge-Off w/ DLA 4/97 (vs. 1/97 filing).

 

DW: 9 IIB's "not mine" - Outcome: 5 deletions, 3 remain - 2 showing as OPEN & 1 changing to CLOSED, 1 came back as Charge-Off(open) w/ DLA 6/97 (vs. 1/97 filing).

 

So, the results are distibuted about like I expected: half or better deleted, presumably due to lack of OC response, one third presumably "verified", and the C.O.s looking like the result of "peeling away" the IIB and revealing the OC's "remaining" C.O. notation.

 

Granted, these should all go away 1/97, except I may have to press the point on the COs with 4/97&6/97. So, I'm not all that in a hurry.

 

However, I would like to attack the "verifiability" of the C.O. accounts somehow and see if I can get rid of them.

 

In summary, I did what I needed to get my house refinanced and we just got a new financed vehicle at 4.5% so I'm ready to go for deletions of things that can't be verified so that they cant later show on an "extended" credit report later (per FCRA 605( exceptions to obsolescence).

 

Yes, I can pull out the Lovern letter as Julie said, but as Dixie just pointed out, why would I argue that way to have IIB put back on ?

 

I want to challenge either the OC or the CRAs to actually verify the accounts and, if they can't, then delete them.

 

Sorry I'm windy in your thread Erik but my situation seems well covered by the general scope of your subject header.

 

Any body have ideas on the two C.O. accts. me and DW now show (2 different OC's) ?

 

Meantime, I have put in "not mine" disputes at EX and TU on both of us for "loner" IIB accts. (IIB TLs only showing at one CRA) to see if they get "verified".

 

P.S. Yes, I'm reading owiebrain and keb's contemporaneous posts now, although I can't use BK discharge contempt arguments in my case. Still digesting though.

 

P.P.S. What's interesting is that both of the accounts that came back as C.O. were listed as IIB from the very beginning, i.e., never affected by my provision of BK docs. back in 2/03.

[owiebrain]

On the automatic stay thing, I thought the stay was done and over with after discharge.

 

Sec. 362. - Automatic stay

 

© Except as provided in subsections (d), (e), and (f) of this section -

 

(1) the stay of an act against property of the estate under subsection (a) of this section continues until such property is no longer property of the estate; and

 

(2) the stay of any other act under subsection (a) of this section continues until the earliest of -

 

(A) the time the case is closed;

 

( the time the case is dismissed; or

 

© if the case is a case under chapter 7 of this title concerning an individual or a case under chapter 9, 11, 12, or 13 of this title, the time a discharge is granted or denied.

 

After that, there's a part for ending the personal liability--gotta go look that up. Anyway, I see automatic stay thrown around but have always wondered about that because of the above section. Am I reading it wrong?

[crofttk]

...

Consider what would happen if you applied for a house, for example. The lender would require you to remove the charge off from your CR. Either you would have to pay it, or you would have to get the creditor to list it as IIB.

...

Just a side note here: although we hadn't gotten ALL accounts marked correctly as IIB, we were fortunate enough in our refinancing that the underwriter accepted our BK docs as proof that we DID NOT have an unpaid C.O. as shown on out CRs !

[owiebrain]

Here we go:

 

http://www4.law.cornell.edu/uscode/11/524.html

 

Sec. 524. - Effect of discharge

 

(a) A discharge in a case under this title -

 

(1) voids any judgment at any time obtained, to the extent that such judgment is a determination of the personal liability of the debtor with respect to any debt discharged under section 727, 944, 1141, 1228, or 1328 of this title, whether or not discharge of such debt is waived;

 

(2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived; and

 

(3) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect or recover from, or offset against, property of the debtor of the kind specified in section 541(a)(2) of this title that is acquired after the commencement of the case, on account of any allowable community claim, except a community claim that is excepted from discharge under section 523, 1228(a)(1), or 1328(a)(1) [1] of this title, or that would be so excepted, determined in accordance with the provisions of sections 523© and 523(d) of this title, in a case concerning the debtor's spouse commenced on the date of the filing of the petition in the case concerning the debtor, whether or not discharge of the debt based on such community claim is waived.

 

So automatic stay is only from filing through discharge. After discharge, it's injunction. I'd just hate to see someone typing up a letter to someone stating they're violation the automatic stay when it should read injunction. Maybe I'm just a wee bit anal, eh?

[owiebrain]

Consider what would happen if you applied for a house, for example. The lender would require you to remove the charge off from your CR. Either you would have to pay it, or you would have to get the creditor to list it as IIB. So they are listing it incorrectly and making an indirect collection effort by doing so.

 

What this issue really needs is for someone to have one of these incorrect listings on their report, apply for a house, and get the lender to write a demand letter that they pay off the "charge off" before getting the loan. I bet you could sue the rear off the creditor in that case. A couple of cases like this and these creditors might stop jerking people around this way.

 

I think this could be argued in court, but whether or not it would win would probably depend on the BK judge. I know of no case law that addresses this issue.

 

That is a wonderful point!! My understanding of the Lovern & McCorkell as

 

Ack. Interrupted by a poopy diaper. Lost my train of thought. Hmm...

 

Okay, the two oft-quoted opinion letters: I interpret them, or I would think a normal, good ol' boy judge would interpret them to mean as I stated above:

 

I think that, if the delinquency was pre-BK, it should use the earlier date. However, if no delinquency pre-BK, then it's supposed to use the BK filing date. That's still on my list of research to do so I'm not sure.

 

I'd love to see someone push it through court based on the ideas in keb's post. I've not seen any case law on it, either, but I'm not so great at sniffing out case law.

 

Crofttk, why can't you file for contempt of the discharge orders? I may have missed the reason in your posts as I'm running back and forth tending the kids while reading this thread. LOL

[Alex]

http://library.lp.findlaw.com/articles/fil...trativelaw_2_12

 

you may have already seen this Erik, but this opinion letter addresses the "charged off" vs IIB issue.

 

Good link Julie but as Krofttk pointed out several weeks back, the opinion letter from McCorkell contradicts that opinion letter. So basically the two letters cancel each other out.

 

Lovern 04/24/ 1998

 

"Section 607( of the FCRA requires credit bureaus "to follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." In our view, it is not a reasonable procedure to label an account that has been discharged in bankruptcy as "charged off as bad debt" if the account was open and not charged off when the consumer filed bankruptcy. Such a designation would be inaccurate or misleading, because it would indicate that the creditor had written off the account at the time of bankruptcy when it had not in fact done so."

 

This points out that it is a violation of the FCRA to list an IIB account as a charge off if the account was in fact open and not charged off as bad debt.

-------------------------------------------------------------------------------------

 

McCorkell 06/03/1999

 

"Specifically, you ask if we concur in your view that "nothing in the FCRA (a) prohibits a creditor from 'charging off' an account, whether before or after the filing of a bankruptcy; ( prohibits a creditor from reporting to a CRA that an account which has been discharged in bankruptcy has also been charged off so long as the credit grantor has in fact charged off the account; or © or prohibits a CRA from reporting an account which has been discharged in bankruptcy as also having been charged off if the creditor has so reported the account to the CRA and the CRA has no reason to believe otherwise." We agree that the FCRA prohibits none of those practices in the circumstances you describe."

 

This points out that it is NOT a violation of the FCRA to list an IIB account as a charge off if the account was in fact open and not charged off as bad debt.

[crofttk]

...

Crofttk, why can't you file for contempt of the discharge orders? I may have missed the reason in your posts as I'm running back and forth tending the kids while reading this thread. LOL

Well, I could although it'll be in the BK court and a little more daunting a task than filing small claims.

 

However, the reason I wouldn't do that at this point is that I'm going for deletion by challenging CRA/OC to actually verify the C.O. tradelines. Back in February, I had no problem getting the TL's to show accurately, by committing one of the mortal sins of credit repair and sending BK docs to the CRAs. Some people would think me dishonest now trying to delete but I'm only using my rights per FCRA to have these TLs be verifiable or be deleted.

[crofttk]

...

Good link Julie but as Krofttk pointed out several weeks back, the opinion letter from McCorkell contradicts that opinion letter. So basically the two letters cancel each other out...

Yes, Erik, I made that point but Sassy later took me to task on beating that drum. She pointed out to me and I came to see how Brinckerhoff is doing a very delicate dance in the McCorkell letter and only saying what the FCRA does NOT prohibit, i.e., saying that FCRA has no impact on that practice. HOWEVER, the important thing here is that, per the link owiebrain posted (I see now, sect. 524 of BK code) listing a BK discharged account as a Charge-Off can be construed as in contempt of the permanent stautory injunction against collection activities/processes granted in discharge.

 

Now my case is a little more complex and more dependent on dispute strategy than law and so I apologize if this takes away from your thread. I have been too lazy to start my own and kinda just hitched a ride on yours. If things get too complex or if you otherwise prefer, I can peel my issue off to another thread.

[Alex]

Owiebrain

 

You nailed it. Good work.

 

OK. So under federal BK laws an account that was discharged (completed) by a BK CH 7 means that if the original creditor charges off the account that was included in the bankruptcy, after the bankruptcy, then the OC is in violation of federal bankruptcy laws.

 

http://www4.law.cornell.edu/uscode/11/524.html

 

"Effect of discharge

 

(a) A discharge in a case under this title - "

 

OK. Here is where it get tricky.

 

"(2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived; and"

 

Based on the wording "to collect any such debt" can we agree that if the OC decides to list the account as a charge off after the BK case was filed, that action would be considered an attempt to collect the debt and, therefor would violate US Code Tittle 11, CH 5, Sub CH II, Sec 524.

 

"Violating the permanent injunction against collecting a debt after discharge from chapter seven bankruptcy."

 

Now, even though the FDCPA does not apply to OC's, I am referring to it because it helps define what action constitutes the action of collecting a debt.

 

"(2) The term "communication" means the conveying of information regarding a debt directly or indirectly to any person through any medium."

 

http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#803

 

So what I am saying is the simple fact that an OC had a CRA update the account as a charge off constitutes an attempt to collect the debt, and is a violation of the federal bankruptcy discharge orders.

 

Now, to deal with this violation you would have to sue in federal district court for actual damages and attorney's fees.

 

"Section 362 (h) An individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, may recover punitive damages."

 

http://caselaw.lp.findlaw.com/casecode/usc...tion%5F362.html

 

Scroll to the very end to see part H. :wink:

[Alex]

I have been too lazy to start my own and kinda just hitched a ride on yours. If things get too complex or if you otherwise prefer, I can peel my issue off to another thread.

 

No problem. We are in almost exactly the same boat.

[crofttk]

..Also, what about dates of status or dates of last activity, for the IIB accounts, than are different that the date the bankruptcy was filed?

Well, one thing you have to be careful of is that these incorrect dates if too recent, like within the last 24 months, will definitely trash your FICO score unduly. This has been a problem for DW and I but was resolved in past months (more by a matter of luck or purpose of the CRA -- can't really get to public about it !).

 

The dilemma, as I mentioned before, is how to correct or eliminate the C.O.s without documenting BK yourself, i.e., doing the OCs' and CRAs' jobs for them.

 

Yes, I'm with all you guys on the answer to Erik's very first question: Reporting Charge-Off period can be construed as contempt of the injunction and could be pursued in the BK court (although I think a 9th District case works against it -- let me check on this).

 

What would be really great is to have a way to leverage either OC or CRA to delete the TL. I have a collection of things to try on our CO accounts that I'm trying to decide which order to try, including Erik's recent letter to OCs that got him two deletions.

[keb]

The thing that bugs me about the McCorkel letter is this:

 

The McCorkel letter says:

 

"You state that (contrary to a comment attributed by Mr. Lovern to a Fair Isaac source in his letter to us) your risk scores assign the same number of points to a bankrupt tradeline regardless of whether that account is also reported as charged off."

 

and concludes:

 

"We agree that the FCRA prohibits none of those practices IN THE CIRCUMSTANCES YOU DESCRIBE."

 

In other words, McCorkel is asserting that listing the chargeoff has no effect on the score, and is just a simple little innocuous additional piece of information.

 

What would have happened if McCorkel had said that there is a clear score difference and a clear difference in lending practices between listing something as IIB or as IIB/Chargeoff? I'm not sure Brinkerhoff would have swallowed that one. And McCorkel can assert all he wants that HIS scoring algorithm doesn't view these differently, but since FICO is a black box, he can hardly claim that ALL scoring algorithms act that way, nor can he claim that people viewing the report will see the two listings as equivalent.

 

If it is really an innocuous and harmless piece of information, then why put it on the report? There's no point.

 

I think McCorkel was trying to pull the wool over Brinkerhoff's eyes, and he succeeded. I suspect this was because McCorkel was too lazy to change his software, but I may be being too charitable.

[Alex]

One of the reasons for starting this thread is the friendly letter I recently received after one of my IIB accounts got turned into a charge off.

 

-------------------------------------------------------------------------------------

BIG BAD BANK

 

Month XX, 2003

 

Dear Mr. Shmuck

 

We are in receipt of your additional concerns directed to the Office of the Comptroller of the Currency regarding the reporting of your BIG BAD BANK account to the CRA's. . . . we have taken the liberty of sending an update to the CRA's . . . . We understand that you are not in agreement with the charge off status that is currently reporting. However when an account is included in a bankruptcy, it will charge off. Therefor, the reporting is accurate.

 

Sincerely,

A high ranking dude

 

 

cc: Office of the Comptroller of the currency.

-------------------------------------------------------------------------------------

EErrr!!!!

[crofttk]

...

"Section 362 (h) An individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, may recover punitive damages."...

Recognizing that this is the stay between filing and discharge, I'd LOVE to have a copy of my CRs from that time period showing that OCs reported lates and C.O. in that interval. Then I would use that as a lever against the OC to get them to delete rather than me go to the BK court with there violation of the stay (actually, there may be an SOL on taking action against this, less than my 6 years down the road.).

[crofttk]

One of the reasons for starting this thread is the friendly letter I recently received after one of my IIB accounts got turned into a charge off...<snipped letter>...EErrr!!!!

Exactly ! So, with the letter you sent, you got 2 deletions and one responded this way, right ? So, to this guy you can show BK docs. and argue the TL is inaccurate AND in violation of the BK injunction, BUT you've cooked you goose in that now he can just show it IIB again ! That's what I'd like to avoid. Of course, in my case, some OCs may delete and I may yet get a hard-ss letter like yours, but I'm only back where I started with an IIB account due to correctly age off 1/97.

[Alex]

Good catch Crofttk.

 

Darn. It must say somewhere in the code that you can sue for violating an injunction. I will look for it.

 

Meanwhile check this out in the notes for section on section 524:

 

"SENATE REPORT NO. 95-989

 

Subsection (a) specifies that a discharge in a bankruptcy case voids any judgment to the extent that it is a determination of the personal liability of the debtor with respect to a prepetition debt, and operates as an injunction against the commencement or continuation of an action, the employment of process, or any act, including telephone calls, letters, and personal contacts, to collect, recover, or offset any discharged debt as a personal liability of the debtor, or from property of the debtor, whether or not the debtor has waived discharge of the debt involved. The injunction is to give complete effect to the discharge and to eliminate any doubt concerning the effect of the discharge as a total prohibition on debt collection efforts. This paragraph has been expanded over a comparable provision in Bankruptcy Act Sec. 14f (section 32(f) of former title 11) to cover any act to collect, such as dunning by telephone or letter, or indirectly through friends, relatives, or employers, harassment, threats of repossession, and the like. The change is consonant with the new policy forbidding binding reaffirmation agreements under proposed 11 U.S.C. 524(, and is intended to insure that once a debt is discharged, the debtor will not be pressured in any way to repay it. In effect, the discharge extinguishes the debt, and creditors may not attempt to avoid that. The language ''whether or not discharge of such debt is waived'' is intended to prevent waiver of discharge of a particular debt from defeating the purposes of this section. It is directed at waiver of discharge of a particular debt, not waiver of discharge in toto as permitted under section 727(a)(9).

 

Subsection (a) also codifies the split discharge for debtors in community property states. If community property was in the estate and community claims were discharged, the discharge is effective against community creditors of the nondebtor spouse as well as of the debtor spouse.

 

Subsection ( gives further effect to the discharge. It prohibits reaffirmation agreements after the commencement of the case with respect to any dischargeable debt. The prohibition extends to agreements the consideration for which in whole or in part is based on a dischargeable debt, and it applies whether or not discharge of the debt involved in the agreement has been waived. Thus, the prohibition on reaffirmation agreements extends to debts that are based on discharged debts. Thus, ''second generation'' debts, which included all or a part of a discharged debt could not be included in any new agreement for new money. This subsection will not have any effect on reaffirmations of debts discharged under the Bankruptcy Act (former title 11). It will only apply to discharges granted if commenced under the new title 11 bankruptcy code. "

 

http://www4.law.cornell.edu/uscode/11/524.notes.html

[Alex]

OK. Here we go.

 

United States Bankruptcy Court for the Southern District of Iowa

 

Case number 86-109C

 

On February 5, 1990, Debtor, Lyle L. Carpenter's Application for

Order to Show Cause Why Creditor Should not be Held in Contempt came

on for hearing.

 

"DISCUSSION The Debtor, Lyle L. Carpenter, has now filed an application for order to show cause why creditor Intervenor, should not be held in contempt. Said Debtor prays that Intervenor be held in contempt of court for commencing the state court action and for failing to voluntarily dismiss said action. The bankruptcy court has the authority to impose sanctions for violations of the §524 discharge injunction.

 

In re Barbour, 77 B.R. 530 (Bankr. E.D.N.C. 1987). Where there is uncertainty regarding the appropriate action with respect to a debt, the creditor should seek an adjudication in the bankruptcy court. In re Gray, 97 B.R. 930, 936 (Bankr. N.D. Ill. 1989) (citing Burley v. American Gas & Oil Investors (In re Heavitz), 85 B.R. 274, 281 (Bankr. S.D.N.Y. 1988)). A creditor takes a calculated risk, under threat of contempt of §524, where it undertakes to make its own determination of what the discharge in bankruptcy means.

 

Gray, 97 B.R. at 936 (citing In re Batla, 12 B.R. 397 (Bankr. N.D. Ga. 1981); McComb v. Jacksonville Pager Co., 336 U.S. 187 (1949)). In the matter sub judice, Intervenor filed the state court petition without seeking the Court's determination of the appli-cability of the §524 discharge injunction to Intervenor's state court action.

 

Therefore, counsel for Intervenor and Intervenor acted at their peril and are in contempt. However, under the circumstances, determination of sanctions, if any, should be withheld. Counsel for Intervenor did not commence representation of Intervenor until November 1989, after Intervenor's prior counsel disqualified themselves when their firm merged with the firm of which counsel for Debtors is a member. Because Counsel for Intervenor was fearful that the time for commencing the action in state court was about to expire, counsel for Intervenors filed the state court petition on November 21, 1989, and informed the Court of Intervenor's state court action by attaching a copy of said state court petition to Intervenor's motion to intervene filed November 21, 1989. IT IS ACCORDINGLY ORDERED: (1) Debtors' Application for Order to Show Cause Why Creditor Should Not Be Held in Contempt is granted; but the determination of sanctions, if any, shall be withheld: and, (2) Intervenors' further pursuit of the state court action prior to the Bankruptcy Court's determination of the applicability of the §524 discharge injunction to the state court claim shall constitute contempt punishable by sanctions.

 

Dated this 11th day of April, 1990. RUSSELL J. HILL U.S. BANKRUPTCY JUDGE "

 

 

 

http://216.239.53.104/search?q=cache:mVFfy...&hl=en&ie=UTF-8

 

OR

 

http://www.iasb.uscourts.gov/iasb_ftp/deci...ions/h00128.pdf

[crofttk]

www.goodwinprocter.com/fsas/FSA_1_29_02.pdf

See: "US Court of Appeals Declines to Recognize Private Right of Action for Bankruptcy Discharge Injunction Violation in “Ride-Through” Case"

 

I think this is the 9th Circuit case I was thinking of that folks have mentioned keeps you from having a "Private Right of Action" and leaves you only with the alternative of having the BK judge issue sanctions against the creditor for contempt of the injunction. Others have argued that this is a fluke decision and may not necessarily prevent you from private action.

 

All of this stuff has been discussed in bits and snatches before. I'm sure Sassy will pipe in here if she notices the thread.

 

What I think is most useful about the BK code, from a practical standpoint, is that you should be able to use it as a hammer against a charge-off report but, ultimately, it leads down the path of a verification and result of having the TL reported only as IIB. If that's your objective, then fine. In my case, I want deletion.

[crofttk]

http://www.weil.com/wgm/cbyline.nsf/88fa32...5256a63007125c7

Here's an interesting article that makes the distinction that a private right of action is more explicitly given against violations of the automatic stay between filing and discharge but is more pessimistic about private right of action against violation of the injunction.