Court Says No Private Right of Action Exists for Violation of Discharge Injunction

Because there is no private right of action for a violation of the discharge injunction under Bankruptcy Code Section 524(a)(2), debtors who had their mortgage debt discharged in bankruptcy could not bring an action in district court seeking enforcement of the bankruptcy court’s discharge order, the U.S. District Court for the Middle District of Pennsylvania held June 23 (Townsend v. M&T Mortgage Corporation).

Judge James M. Munley, following Third Circuit precedent, also concluded that Section 105(a) does not permit such an action in district court. Accordingly, the judge said the debtor-plaintiffs must go before the bankruptcy court to ...