Creditor’s Accurate Post-Petition, Pre-Discharge Report to Credit Reporting Agency of Outstanding Balance did Not Violate Stay

Creditor’s Accurate Post-Petition, Pre-Discharge Report to Credit Reporting Agency of Outstanding Balance did Not Violate Stay

The Debtor seeks sanctions against Verizon for alleged violation of the automatic stay under 11 U.S.C. §§ 362(a)(6) and 362(k). The narrow issue before the Court is whether a creditor’s accurate reporting post-petition—but pre-discharge—of a debtor’s outstanding balance to a credit reporting agency violates the automatic stay. This narrow issue is one of first impression within the Third Circuit.

The Debtor filed a Chapter 7 Bankruptcy case and listed Verizon on Schedule F. The Debtor alleges that even though Verizon had notice of the filing, it still continued collection efforts by reporting the debt on his credit reports. He that Verizon’s post-petition, pre-discharge credit reporting constituted a willful violation of the automatic stay under Section 362(k).

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the Debtor received his discharge in the instant case. On the same date, Verizon again reported the status of the Debtor’s account to TransUnion and Experian, but changed it to show $0.00 as current and $0.00 as past due.

Since the Debtor did not allege any facts, beyond what he concedes is Verizon’s truthful reporting of his pre-petition debt to credit reporting agencies, that connect Verizon’s reporting to any attempt to collect a debt, the Court found that Verizon’s truthful reporting of the Debtor’s outstanding balance amount to credit reporting agencies post-petition—but pre-discharge—did not violate the automatic stay.

The Court was persuaded by a case from Bankruptcy Court for the Southern District of Texas which held that merely reporting a debt to a credit reporting agency, without any evidence of harassment, coercion, or some other link to show that the act is likely to be effective as a debt collection device, failed to qualify as an “act” that violates the discharge injunction.

The Court held that the mere act of reporting a debtor’s truthful credit information post-petition—but pre-discharge—without further evidence that the creditor is attempting to collect the debt, is not a violation of the automatic stay

In re Porcoro (Bankr D NJ Mar. 28, 2017)

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