The term “discharge” means to release from debt. It comes from carrus, meaning a two-wheeled wagon, and dis- meaning to do the opposite of. So, the original meaning of discharge was to remove someone or something from a cart.
A “Discharge” is the final result that most people who file bankruptcy are hoping to achieve. A discharge in bankruptcy voids any judgment for pre-petition liability, and operates as an injunction against the commencement or continuation of an action, to collect any debt that was owing by the debtor at the time debtor’s bankruptcy petition was filed. See 11 U.S.C. Sec. 524.
On rare occasions, creditors will continue to attempt to collect a debt that has been discharged in bankruptcy. When that happens, a debtor can file a motion in the bankruptcy court to have the creditor held in contempt of court for violating the discharge injunction. The court can impose civil contempt sanctions when there is no objectively reasonable basis for concluding that the creditor’s conduct might be lawful under the discharge order. Taggart v. Lorenzen, 139 S.Ct. 1795, 1801 (2019).
The creditor and the creditor’s attorneys are jointly and severally liable for their violations of the discharge injunction. Vazquez v. Sears, Roebuck & Co. (in re Vazquez), 221 B.R. 222, 231 (Bankr.N.D.Ill. 1998). The damages that can be imposed include debtor’s attorney fees, other damages resulting from the violation, and possibly punitive damages. Our office is currently working on a case where the creditor is continuing to pursue a lawsuit in state court where the underlying obligation was discharged in bankruptcy. The bankruptcy court has ordered the parties to mediation, where hopefully a fair settlement will be reached. We will let you know the outcome.