Those in Cuyahoga Falls who choose to file for Chapter 13 bankruptcy protection work with the court to arrange repayment of a large portion of those debts over a set period. Typically, creditors are entitled to at least the amount they would have received through a liquidation of non-exempt assets. The bankruptcy filer will then follow the payment schedule through the life of the bankruptcy. Once the Chapter 13 is discharged, the debts are discharged, as well. A failure for creditors to accept this discharge when their debts are included under the Chapter 13 could open them up to legal action from their former debtors.

Such appears to be the case with a St. Louis couple currently suing a credit company over the release of their vehicle’s title. The couple financed their car with the company back in 2004. The auto loan was included in their Chapter 13 bankruptcy in 2009. Now that the bankruptcy has been discharged, the couple has requested that the credit company release the certificate of title. Yet they allege that the credit company has refused to comply, even though the remaining $1,500 in interest owed on the loan should have been discharged with the bankruptcy.

Bankruptcy protection is meant to provide just that: protection from creditors. Should creditors continue to hold onto assets or records because of debts that should have been resolved with a bankruptcy, they could potentially be violating the bankruptcy’s automatic stay, which prohibits all collection activity. Those who find themselves fighting with former creditors over debts discharged during bankruptcy may wish to seek the assistance of a bankruptcy attorney to help resolve the issue. 

Source: Madison Count Record “Class action claims credit company refused to release certificate of title” Apr. 02, 2014