Zombie Debt and the Metaphysics of Discharge
The NYT has a piece about credit reporting of so-called "zombie debt"--debt that has been discharged in bankruptcy. Apparently the US Trustee Program is investigating various creditors in connection with this debt.
The reporting obscured a bit of very subtle bankruptcy metaphysics. The discharge of debt in bankruptcy does not void the debt. The debt is still owing. But it cannot be collected except if the debtor volunteers to repay it. The discharge is an injunction against the enforcement of the debt against the debtor as a personal liability. The discharge voids judgments on the debt, but not the debt (and it does not prevent the enforcement of liens). In other words, the debt still exists post-discharge. It just isn't enforceable.
That means that there is nothing per se inaccurate about the debt being reported to a credit reporting agency as owing, provided that the debt is also reported as discharged in bankruptcy. (Different story altogether under Fair Credit Reporting Act and Fair Debt Collection Practices Act if the discharge is not reported.)
As far as I can glean from the reporting, the problem seems to be less the continued reporting of the debt than creditors saying that they will only cease reporting it as owing if the debt is paid. Is that a violation of the discharge injunction? I'm not sure. It is fine for a private party to require payment as a condition of future dealings: "pay up if you want to do another deal with me." But that's not quite this situation. The purpose of continuing to report a discharged debt is not to invite a condition of future dealings. Instead, its purpose (other than if continued reporting were the default) would seem to be to extract payment, which would be an "act to collect, recover, or offset any such debt as a personal liability of the debtor." It'll be interesting to see more about how this plays out.