The Defendant mortgage creditor moved to dismiss the Plaintiff-Debtor’s complaint for violations of the discharge injunction and automatic stay. The Defendant’s secured mortgage claim was treated as a short-term secured debt in the Plaintiff’s confirmed chapter 13 plan. The Plaintiff made all payments required under her plan and received a discharge on June 18, 2019. The chapter 13 trustee's final report stated the Defendant's $34,158 secured claim was paid in full with interest.  Following discharge, the Defendant sent a series of informational statements to the Plaintiff claiming it had not received all mortgage payments since the bankruptcy filing and asserting the Plaintiff owed thousands of dollars in principal balance on the mortgage. The Plaintiff moved to reopen her bankruptcy case and then filed a complaint against the Defendant alleging that its actions violated the automatic stay and the discharge injunction under 11 U.S.C. § 524(i) by willfully failing to credit payments it received in accordance with the confirmed plan.

          The Court granted the Defendant’s motion to dismiss the Plaintiff’s claim that it violated the automatic stay because the complaint did not assert the Defendant took any action to collect the claim during the case. The only alleged attempts to collect the claim occurred post-petition and after the termination of the automatic stay.

          The Court also found that the Defendant’s actions could not violate Section 524(i) due to the nature of the Defendant’s claim and its treatment under the confirmed plan. The Court found that a reading of § 524(i) that is limited in application to long-term debts that are not discharged at the successful conclusion of a confirmed plan clearly aligns with the plain text of the provision, is contextually consistent with the surrounding paragraphs of § 524, including those contemporaneously added through BAPCPA, and most accords with Congressional purpose behind enacting § 524(i). Because the Defendant’s short-term, partially secured debt was not encompassed by § 524(i), the Court found the Plaintiff failed to plausibly plead a claim for relief under subparagraph (i).

          While the alleged notices sent by the Defendant could not violate Section 524(i), the Court nevertheless found that the Plaintiff could pursue the traditional remedy for a violation of the discharge injunction, which lies in a contempt proceeding for a creditor's breach of one of the protective provisions described in Section 524(a). The Court found the Plaintiff met the plausibility standard in pleading, under the standard established by the Supreme Court in Taggart v. Lorenzen, 139 S. Ct. 1795 (2019), that there is no fair ground of doubt that the Defendant understood the effect of the discharge order and continued to attempt collection on its discharge debt. Therefore, the Court denied the Defendant’s motion to dismiss as to the Plaintiff’s claim for violation of the discharge injunction.