SCOTUS to Consider Creditors’ Collection Acts Post-Bankruptcy

The U.S. Supreme Court agreed to decide whether a creditor’s collection action against a bankruptcy debtor after the bankruptcy was wrapped up can subject the creditor to sanctions, even where the creditor had a good-faith belief that it wasn’t doing anything wrong in going after the debtor in court post-bankruptcy.

Normally, debtors are protected from collection actions after a court discharges or wipes out their debts in bankruptcy. A creditor that violates the bankruptcy injunction can be penalized.

The U.S. Supreme Court will decide whether a creditor’s subjective understanding that a collection action taken against a post-bankruptcy debtor didn’t violate ...