[CLBS] Violations of Discharge Orders

[William J. O'Connor]

Clients filed for Chapter 7 in 2009 and they were granted a discharge on January 28, 2010.  Clients owned a house (formerly their primary residence) in Oregon for which the debt was discharged in the bankruptcy.  

The home-loan Lender sent Escrow account statement and a bill to Clients in January 2012.

July 27, 2012:  Lender sued Clients in Oregon state court, filing in rem but also asking for a judgment of over $147,000.  Attached as Exhibits to Lender’s complaint are copies of the note, the deed of trust, an assignment of the deed of trust, and the discharge order.  Lender plead as follows:  “The terms of the Note and Deed of Trust provide that in an action to collect the Note, or to foreclose the Deed of Trust, there shall be included in the judgment a reasonable sum for attorneys’ fees, litigation costs, and the cost of title search.”

Lender received a default judgment.  

Lender continued to send monthly bills to clients throughout 2014 reflecting substantial interest and fees in addition to the amount previously owed pursuant to the note and deed of trust. Bills clearly demand payment from Clients.

The subsequent bills are clearly violations of the discharge order.  Any experience or opinions regarding the In Rem lawsuit?  Asking for a monetary judgment, especially for specific items like attorneys’ fees, seems to be a violation even though the suit was In Rem.  Thoughts?

Is there a statute of limitations regarding violations of the discharge order?  

Thanks in advance for feedback.

> William J. O'Connor
> O'Connor Law, PLLC
> 355 West Myrtle Street 
> Suite 100
> Boise, ID 83702
> 
> Office:  208-344-5095
> Fax: 208-424-3100