Bankruptcy Law/old creditor

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Question
Dear Mr. Hertz, I went through a successful chapter 7 Bankruptcy, 9 years ago, I live in California. One of my dismissed creditors was Discover card. Six months ago I was sent a application for a new Discover card, I applied and was accepted. I recently purchased a bed for 6 hundred dollars. The first bill has not come yet. My question is this...A family member told me yesterday that if I pay in full or a installment, that Discover Card will add my old dismissed amount onto this new account. They said this is a trick that they play to get the old owed amount? Can this be true? If so what can I do now? Thank you in advance for your answer.

Answer
That shouldn't happen, because the old debt is barred both by the bankruptcy discharge and the statute of limitations of California.  But I can see what your family member is worried about, and I sort of wonder why you chose Discover rather than one of the cards that was not involved in the bankruptcy.

If you really want to be cautious, you could mail the check with a statement that says, "This check [No. and date] is to be applied to payment of [specify the specific debt or debts] and no other.  If there are any questions concerning this, please contact me prior to applying the check to the debt."  Put the same on the back of the check.  If they applied the check to the old debt, they would be violating the bankruptcy discharge stay.

You may want to think about getting a different card to avoid this sort of hassle.

Another thing would could try is to pay the minimum required on the card without providing any warnings.  If they apply it properly, then you can presumably do business with them.  If they pull funny stuff, tell them that the old debt was discharge and you will sue for punitive damages.  Send them a letter to that effect and call them as well and then contact your bankruptcy lawyer.

The likelihood is that Discover will not try to do anythiing like that -- but better to be safe than sorry.

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Volunteer


Michael T. Hertz

Expertise

I am already listed as a volunteer under "Collections Law," but actually I am a bankruptcy lawyer. I am a member of bar in California and in Massachusetts and have practiced in bankruptcy since 1978 and have also taught bankruptcy law at the law school level (in Maine and Oregon). I can answers questions with respect to all bankruptcy chapters, having represented creditors, debtors, trustees, creditors committees, and persons involved in defending actions in bankruptcy court.

Experience

See above. Basically, 33 years of experience.

Organizations
inactive member of State Bar of California; inactive member of bar in Massachusetts; former member of bar in Maine; former conseil juridique in France.

Publications
California Bankruptcy Law Review; Georgetown Law Journal; numerous others. See my resume.

Education/Credentials
Harvard Law School, J.D.; Pomona College, B.A.

Awards and Honors
Superlawyer in Northern California, 2005 and 2006

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