When you file for
bankruptcy, some of your debts can be discharged. That means you’re not liable
for paying the remaining balance on specific loans. Additionally, creditors
and/or lenders are prohibited from attempting to collect on the balance
or taking legal action against you to recover funds.
Although you are no longer obligated to make payments on a discharged debt,
bankruptcy does not completely erase the amount you owed. The creditor
would still have your loan on their books, often taking a loss for the
remaining balance. In some cases, they may sell your account for a lesser
amount or charge it off.
Choosing to Make Voluntary Payments
Recognizing that some creditors might be hit with a loss because of your
bankruptcy filing, you might feel morally obligated to voluntarily make
payments on the remaining balance. For instance, the discharge may have
included money you borrowed from a relative, a loan you have a cosigner
on (a creditor can still attempt to collect money from a cosigner if you
filed for bankruptcy, but they didn’t), or a bill from a medical
provider that you want to keep visiting. Rather than breaking ties or
creating strained relationships with these individuals or companies, you
can choose to voluntarily make payments even after the debt has been discharged.
Federal Bankruptcy Law
Under 11 U.S.C. section 524(f), you can pay any creditor or lender you
want. Specifically, the law states that “nothing contained in subsection
(c) or (d) of this section prevents a debtor from voluntarily repaying
Negative action cannot be taken against you for voluntarily sending money
to a lender. Your discharged debt won’t become reactivated nor can
creditors resume contacting you to collect funds or bring legal action.
Before Making Voluntary Payments
It’s important to contact the companies you’re planning to
begin repaying before sending funds. They may have closed the account
or sold it and might not have a record any longer, which means your money
could be sent to the incorrect place. You might also be restricted in
how you can make payments, and you may need to find out if you can submit
online or if you must mail in a check.
Contact Albaugh Law Firm Today
If you’re considering paying a discharged debt or are thinking about
filing for bankruptcy, speak with our skilled attorney as soon as possible.
With over 70 years of combined experience, we know the intricacies of
these processes and can help you understand your options.
Discuss your situation with us by calling (904) 637-1839 or
filling out an online contact form.