Espinosa, No. 4:92-bk-03819-EWH (Bankr. D. Ariz., June 8, 2011)
When you complete your Chapter 13 plan, the court will grant you a discharge of much of remaining debt, and you will not longer be required to pay it. The creditors you owed the debt to are forbidden from trying to collect on it, as well. Even if the bankruptcy court made a mistake in discharging certain debts, the creditor can still not collect without the permission of the bankruptcy court.
In this case, Francisco Espinosa completed his bankruptcy plan, and received a discharge. Among the discharged debts were his student loans, which are normally not able to be discharged. However, the bankruptcy court allowed Francisco to discharge the loans, and the lender did not object.
Only afterwards did the lender object and try to collect on Francisco’s student loan debt. The lender argued that student loans are not dischargeable, and the court made a mistake in doing so. But the court said that, mistake or not, the lender should not have gone after the loans. To penalize the lender, the court ordered it to pay fines.
To read the entire In re: Espinosa, No. 4:92-bk-03819 see here.
If you are dealing with any of these troubles in your bankruptcy or are considering filing for bankruptcy, consult with a tucson bankruptcy attorney today.
Stephen M. Trezza