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Debtor harassed by Bank of America

According to the Bankruptcy Law Network, Bank of America called a debtor 38 times to inquire about outstanding payments. Not necessarily a crime. But unfortunately for the popular lender, the debtor in question had recently received a discharge through bankruptcy.

Under the law, all collection actions -- including letters, phone calls and foreclosure sales -- must stop once a debtor declares bankruptcy. This temporary automatic stay on creditors is replaced by a permanent injunction once a debt discharge is approved. Anyone found in violation can be held liable for actual or punitive damages.

For Bank of America, that will mean shelling out $12,500 in attorney's fees and compensation for emotional distress, as ordered in a recent court ruling. The case darkens what the Huffington Post already reports as the bank's "less than exemplary" record when it comes to dealing with debtors.

It appears that several problems arose when Bank of America sent debtor information to outside collection agencies, even though a select number of those debtors had already filed discharges. In one instance, a court ruled that an outside agency's actions were "clearly inadequate" when it came to checking whether discharges were in place.

Another instance involved a woman who spent nearly three years attempting to convince debt collectors she didn't owe a dime. Bank of America had sold the rights to her account, despite the fact that she had settled all outstanding debts long ago.

Reports by American Banker indicate that the harassing collectors were acting on behalf of CACH LLC, an agency to which Bank of America had sold the right to sue over a number of credit card debts. The sale was made even though the bank acknowledged potential record inaccuracies.

Source: The Huffington Post, "BofA Allegedly Called Debtor 38 Times After He Filed For Bankruptcy," Alexander Eichler, March 30, 2012

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