Bankruptcy

Can I Pay My Creditors Even After I Received A Bankruptcy Discharge?

By Adrian Lapas, Eastern North Carolina Bankruptcy At

Yes, you can pay your creditors after you received a bankruptcy discharge.  Nothing prohibits you from voluntarily paying your creditors, either one or two creditors that are important to you, or all of them.  Of course, as a bankruptcy lawyer, it begs the question– if you want to pay your creditors and assuming that you have to the means to do so, why are you seeking bankruptcy protection in the first place?

This is actually not as silly a question as it seems.  Often, people have creditors that are important to them.  In most situations where this arises, it is a family member that has loaned the debtor money.  Of course, the debtor does not want to “bankruptcy” the debt owed to mom and dad.  Go ahead and list the debt but, once your case is over, nothing prohibits you from voluntarily repaying mom and dad. 

Another typical situation is where the debtor may run an account at a small, local store such as a pharmacy (not a retail chain) or corner store.  It is beneficial to have that access to a running account so the debtor may choose to pay that debt even after the bankruptcy case is over and the debt is discharged.

However, your creditor may not contact you to attempt to “persuade” you to “voluntarily” pay the debt.  To do so would be considered an attempt to collect a discharged debt in violation of the discharge injunction–the court order absolving you of your debts and the whole reason you filed bankruptcy.

Also, you should be very, very careful about making payments on a discharged debt particularly if the debt is to a more sophisticated creditor.  Typically, if a creditor were to sue you on a discharged debt, you could raise the fact that the debt was discharged in bankruptcy by raising it as an affirmative defense in state court litigation or you could remove the action to bankruptcy court and allow the bankruptcy court to enforce its discharge injunction.  By making payments on a discharged debt, it could be considered a “waiver” of the bankruptcy discharge on that particular debt.  As such, you should be very careful about paying debts that are discharged.

While nothing prohibits you from voluntarily repaying a debt to a creditor, this is not a decision that should be entered into lightly.  The discharge injunction which prohibits creditors from attempting to collect debts that were owed is the whole reason for seeking bankruptcy protection in the first place so that you would not want to fritter that valuable protection without some very good reasons.

Full post as published by Bankruptcy Law Network on July 23, 2010 (boomark / email).