Overview:

Attempting to Collect Debt Discharged in Bankruptcy May Violate FDCPA.

The Court refused to dismiss a suit brought by a debtor whose debts had been discharged in bankruptcy. A bank bought a discharged debt and attempted to collect the debt. That may be a violation of both the Fair Debt Collection Practices Act and the Bankruptcy Code.

Case Summary:
Wagner filed Chapter 7 bankruptcy and received a discharge of her debts in 1997. Among the debts discharged was a note secured by a mortgage of real property. After the discharge, the note and mortgage were assigned to Ocwen, which is in the business of buying and collecting defaulted debts. Ocwen attempted to collect the discharged debt from Wagner. She sued, claiming violation of the Fair Debt Collection Practices Act for attempting to collect money from her that she did not owe. Ocwen moved to have the claim dismissed, contending that her only remedy would be under the Bankruptcy Code.

Decision:
Since Wagner's debts had been discharged, she was not a debtor to Ocwen, who attempted to collect money from her. Ocwen's claim that only the Bankruptcy Code, but not the Fair Debt Collection Practices Act, could apply is incorrect. Both laws can be violated at the same time. Ocwen could be found in contempt of the Bankruptcy Code and in violation of the FDCPA. "Wagner's FDCPA claim, at its foundation, is no different from that of any other debtor who is dunned by a creditor who in fact is not owed any money; the fact that her debt was discharged in bankruptcy does not logically differentiate her case from that of a debtor whose debt was discharged in some other way."