You have filed and completed your Chapter 7 or Chapter 13 Bankruptcy case, and finally received your all-important discharge. Unless you have very unusual circumstances, you did not officially reaffirm any of your debts in your case. However, now you have thought about it and you want to pay back a certain pre-petition debt that was discharged. Maybe it is to a friend or family member, or to a small bank or credit union you would like to keep doing business with. Maybe it is the entire debt, or just part of it. Are even you allowed to do that with all the very strict laws you have been told about? The answer is yes, you absolutely can!
Your discharge is a powerful benefit. It is a permanent legal bar from a creditor ever attempting to collect that debt, or even trying to pressure you to repay the debt. However, it is your benefit and your legal right to enforce, and not in any way a restriction against you that limits how you choose to conduct your affairs after the case. You can pay back anyone or everyone, for any reason or no reason, as much or as little as you want. It is your personal decision and you have to answer to no one. The only important issue is that it should be your decision, without any pressure from the creditor.
That said, I will add a few comments to help you avoid problems when considering repaying discharged debts. First, if it is a simple matter of you making a personal decision to repay the debt “just because,” then the best way to handle it is to … just pay it back when you are able. That’s it. Avoid going back and forth in conversations, emails, texts and so on about paying it back in the future, and avoid “promises” to pay it back if at all possible. That just potentially creates false expectations that do not help either of you. You also do not want to deal with the other person continuously bringing up emails and texts and other promises to repay (and they will!) — eventually both of you will get annoyed.
Finally, after the above comments this should be no surprise, but absolutely do not sign any agreement, or in any way firmly agree to any purported “agreement” in email or otherwise, to repay the debt even if you fully intend on doing so. As above, there is no good reason for doing so. There are also more good reasons for not doing so. The “contract” is worthless, but the friend or family member might mistakenly believe you voluntarily reinstated the debt with a binding legal contract. If they get frustrated enough (remember those false expectations?), they might try to collect and even sue. Then you have to defend and allege that they have violated your discharge injunction, and the relationship is shot. This might sound far fetched and “it won’t happen to me,” but if you are in this situation and are reading this you probably already know the stress that comes with owing money to friends and family. This does happen, and is so easily avoidable.
There are exceptions where a pre-petition debt may be reinstated in a written contract, but those are beyond the scope of the simple situations discussed here and will almost always involve a review by a lawyer. For example, home loan modification might involve a voluntary reinstatement of the loan, and there should certainly be a benefit to you for that. Always have any such contract reviewed by a lawyer before signing!
Scott Riddle is a Bankruptcy and Foreclosure lawyer in Atlanta, Georgia. The best way to contact us is by phone at 404-815-0164. You can also email scott@scottriddlelaw.com, or contact us through the contact page.