Expert: Terry Leeders - 12/1/2008

Question
QUESTION: Hello,
I filed for chapter 7 and was discharged in May of 2008. One of the debts I listed was a civil agreement that I signed with a former employer to repay what they claimed was money I obtained by fraud.The courts were not involved in this agreement. They did nothing to notify the bankruptcy court,object to the discharge or have me reafirm the debt. All they did was have a lawyer show up at the meeting of creditors. I expected him to have me sign a reaffirmation, but he didn't.Several months after the discharge they filed criminal charges and had me arrested.

It seems to me that they have;

1. violated the discharge order by not informing the bankruptcy court or having me reaffirm the debt and then pressing charges.

2. They, a private citizen, have been the impetus for having me arrested for a pre-petition debt and have also violated the automatic stay by doing so.

Is this correct ?

ANSWER: There are several issues here.
1.  You should notify the court of the bankruptcy case when your court date comes up.
2.  If they are collecting on a debt, then you would have a potential claim against them for violation of a bankruptcy discharge.
3.  Criminal debts are not discharged in bankruptcy.  Any criminal charges are a separate matter than the underlying debt you may have agreed to pay back (which may or may not be dischargeable in the case, ask your lawyer.)  These charges are separate than collection on the agreement you had and can still proceed, despite the bankruptcy.

---------- FOLLOW-UP ----------

QUESTION: Thanks for the quick response.

I am aware that criminal charges are a separate matter, but I also understand that since this was a pre-petition debt and there were no charges filed pre-petition, that under the code a private citizen cannot be the impetus for an arrest.

I suppose what confuses me is that this was not a criminal case before the discharge, the debt was discharged and now after the fact they are charging me. I have read case law that implies this kind of timing is a violation. Is that true or will it simply rely on a judges opinion ?

Answer
By filing criminal charges, it will not be deemed a violation of the bankruptcy discharge in most cases.  They are not collecting on the debt, but pursuing criminal charges.  You should speak with both a local criminal attorney and your bankruptcy attorney to properly defend yourself as your local laws may vary.