Amanda Minech

CLERK

U.S. BANKRUPTC(

IN THE UNITED STATES BANKRUPTCY COURT COURT - WDPA

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

In re: : Case No. 18-21030-GLT

: Chapter 7

AMANDA MINECH, :

Debtor. :

AMANDA MINECH, :

Movant, : Related to Dkt. Nos. 20, 24, and 35

Vv. :

CLEARVIEW FEDERAL :

CREDIT UNION, :

Respondent. :

Mary Bower Sheats, Esq. Matthew E. Kaslow, Esq.

Mary Bower Sheats, Attorney at Law Roy W. Arnold, Esq.

Bridgeville, PA Blank Rome LLP

Attorney for the Movant Philadelphia, PA

Attorneys for the Respondent

MEMORANDUM OPINION

To ensure a debtor’s fresh start, the Bankruptcy Code! bars actions designed to

collect, recover, or offset a pre-petition, discharged debt as a personal liability of the debtor.’

But the discharge injunction is not a panacea for all problems or hardships following bankruptcy

relief. Case in point, Amanda Minech (the “Debtor”) seeks to reopen her chapter 7 case to hold

Clearview Federal Credit Union (“Clearview”) in contempt of the discharge injunction based on

| Unless expressly stated otherwise, all references to “Bankruptcy Code” or to specific sections shall be to

the Bankruptcy Reform Act of 1978, as thereafter amended, 11 U.S.C. § 101, ef seg. All references to

“Bankruptcy Rule” shall be to the Federal Rules of Bankruptcy Procedure.

2 See 11 U.S.C. § 524(a)(2).

an inaccurate credit report that allegedly damaged her credit score and disqualified her from

receiving a loan from the Federal Housing Administration (“FHA”).3 Clearview admits the error

and has since corrected it, but denies that the report by itself constituted an act to collect a

discharged debt.4 Ultimately, the Court agrees that the credit report was not coercive when

viewed in isolation and, as a result, finds that reopening the case to be unwarranted. Thus, for

the reasons set forth below, the Court will deny both motions.

I. BACKGROUND

The salient facts are not in dispute. The Debtor filed a voluntary chapter 7

petition on March 19, 2018. Clearview appeared as a creditor on Schedules D and E/F,

reflecting an unsecured credit card debt and separate a car loan secured by a 2012 Chevrolet

Malibu.5 The Debtor did not reaffirm either debt to Clearview. Following the Chapter 7

Trustee’s Report of No Distribution, the Court granted the Debtor a discharge under section 727

on July 11, 2018.6

Two years later, on July 15, 2020, the Debtor discovered that Clearview had

reported to Experian that it “charged off” one of the accounts. As proof, the Debtor attached an

Experian credit report dated January 29, 2021 to the Motion for Contempt as an exhibit (the

“Credit Report”).7 The Credit Report contains three closed accounts pertaining to Clearview.8

3 See Petition to Reopen Case to File Contempt Motion to Enforce the Discharge Injunction (“Motion to

Reopen”), Dkt. No. 20; Motion for Civil Contempt to Enforce the Discharge Injunction Against Clearview

Federal Credit Union (“Motion for Contempt”), Dkt. No. 24.

4 See Clearview Federal Credit Union’s Response in Opposition to Debtor’s (A) Petition to Reopen Case to

File Contempt Motion to Enforce the Discharge Injunction and (B) Motion for Civil Contempt to Enforce

the Discharge Injunction (“Response”), Dkt. No. 35.

5 See Schedule D: Creditors Who Have Claims Secured by Property, Dkt No. 1 at 18; Schedule E/F:

Creditors Who Have Unsecured Claims, Dkt. No. 1 at 20.

6 Order of Discharge, Dkt. No.16.

7 Ex. 4 – Credit Report, Dkt. No. 24-4.

8 Ex. 4 – Credit Report, Dkt. No. 24-4 at 26-30.

Two accounts, one identified as a “Credit Card – Revolving Term” and the other an “Auto

Loan,” show a payment status of “[d]ebt included in or discharged through Bankruptcy Chapter

7, 11, or 12.”9 The third, described as an “Unsecured Loan,” curiously shares an account number

with the Auto Loan and has a payment status listed as “Charge-off.”10 It also notes a past due

amount of $634.11

The Debtor contends that her credit score dropped 26 points because of the

adverse report on the Unsecured Loan.12 She disputed the report with Experian, though it is

unclear when that occurred or what was said. Experian responded that Clearview had verified

the accuracy of the information reported, but reduced the past due amount from $1,078 to $634

(as reflected in the Credit Report).13 Two days later, the Debtor sought assistance from the

“CreditXpert Wayfinder,” which advised her to pay off Clearview to increase her credit score.14

Instead, she returned to her bankruptcy counsel for help.

On February 3, 2021, the Debtor’s lawyer sent a demand letter addressed to

Clearview’s Chairperson of the Board of Directors (the “Chairperson”).15 To avoid a contempt

action, the letter urged Clearview to immediately instruct all credit reporting agencies to remove

the adverse report and have its attorneys contact her.16 When Debtor’s counsel did not receive a

response from Clearview after 20 days, she filed the Motion to Reopen and the Motion for

9 Id. at 28, 30.

10 Id. at 26.

11 Id.

12 Ex. 3 – Notice of Charge Off, Dkt. No. 24-3.

13 Ex. 5 – Experian Dispute Report, Dkt. No. 24-5 at 1-2.

14 Ex. 6 – Credit Assistance Report, Dkt. No. 24-6.

15 Ex. 7 – Counsel’s Letter to Clearview, Dkt. No. 24-7.

16 Id.

Contempt. Notably, the Motion for Contempt was similarly served on the Chairperson before the

Court directed the Debtor to complete service in accordance with Bankruptcy Rule 7004(h).17

In the Motion for Contempt, the Debtor argues that Clearview willfully violated

the discharge injunction by improperly reporting the Unsecured Loan as a “charge-off” rather

than discharged in bankruptcy.18 As the “direct and proximate result” of the adverse report, she

alleges that her credit score dropped by 26 points, placing her below the level needed to qualify

for a FHA mortgage loan.19 Consequently, the Debtor was unable to purchase “the home of her

choice” and has remained in a rented dwelling.20 She contends that she has suffered damages in

excess of $10,000 and incurred $2,500 in attorney’s fees.21 Yet critically missing from the

Motion for Contempt is any assertion that the adverse report was an act to collect a debt. Also

absent is an allegation that Clearview refused to correct the adverse report.

In response, Clearview denies that it tried to collect a debt, but concedes that it

inadvertently mischaracterized the status of one account to Experian. The erroneous report

allegedly stems from a mistake made during an internal record update that reclassified the credit

card as a loan, apparently creating a third account (the Unsecured Loan) that was reported

17 See Fed. R. Bankr. P. 7004(h). Bankruptcy Rule 7004(h) provides in relevant part:

Service on an insured depository institution . . . in a contested matter or adversary

proceeding shall be made by certified mail addressed to an officer of the institution

unless—

(1) the institution has appeared by its attorney, in which case the attorney shall

be served by first class mail;

(2) the court orders otherwise after service upon the institution by certified mail

of notice of an application to permit service on the institution by first class mail

sent to an officer of the institution designated by the institution; or

(3) the institution has waived in writing its entitlement to service by certified

mail by designating an officer to receive service.

Id. (emphasis added).

18 Motion for Contempt, Dkt. No. 24 at ¶ 19.

19 Id. at ¶¶ 20-23.

20 Id. at ¶¶ 24-25.

21 Id. at ¶ 26.

alongside the two accurately discharged accounts.22 Clearview insists it did not discover the

problem earlier because the Debtor’s communication with Experian related to the overall status

of the account and did not identify the discharge as the impetus for her complaint.23 Otherwise,

Clearview asserts that the adverse report was promptly corrected once the demand letter, which

the Debtor “improperly” addressed to the Chairperson, was received by the appropriate

department.24 Indeed, Clearview informed Debtor’s counsel of their corrective actions the same

day she filed the motions.25

At the hearing on both motions, the Debtor explained that Clearview’s remedial

measures had only increased her credit score by 7 points and suggested it could take months for

it to fully recover.26 Though she admitted that her allegations against Clearview were confined

to credit reporting, the Debtor relied on In re Torres27 and In re DiBattista28 to argue that post-

discharge false credit reporting is itself a collection activity. In contrast, Clearview cited In re

Helmes29 for the proposition that a derogatory credit report arising from human error is not an act

to collect a debt. The parties did not request an opportunity to brief the issues, though the Debtor

22 Response, Dkt. No. 35 at ¶¶ 4-5; Declaration of Donna Love in Support of Clearview Federal Credit

Union’s Response in Opposition to Debtor’s (A) Petition to Reopen Case to File Contempt Motion to

Enforce the Discharge Injunction and (B) Motion for Civil Contempt to Enforce the Discharge Injunction

(the “Love Declaration”), Dkt. No. 35-1 at ¶¶ 3-4.

23 Response, Dkt. No. 35 at ¶ 6.

24 Id. at ¶¶ 8-13; Love Declaration, Dkt. No. 35-1 at ¶¶ 5-8.

25 Declaration of Matthew E. Kaslow in Support of Clearview Federal Credit Union’s Response in

Opposition to Debtor’s (A) Petition to Reopen Case to File Contempt Motion to Enforce the Discharge

Injunction and (B) Motion for Civil Contempt to Enforce the Discharge Injunction (the “Kaslow

Declaration”), Dkt. No. 35-2 at ¶¶ 2-4.

26 For the sake of completeness, the Court notes that Clearview posits that the erroneous report may not have

been the sole cause of the 26-point drop in the Debtor’s credit score. See Response, Dkt. No. 35 at ¶¶ 23-

26. Ultimately, that is a question of fact beyond the current procedural posture.

27 Torres v. Chase Bank USA, N.A. (In re Torres), 367 B.R. 478 (Bankr. S.D.N.Y. 2007).

28 DiBattista v. Selene Fin., LP (In re DiBattista), 615 B.R. 31, 43 (S.D.N.Y. 2020)

29 Helmes v. Wachovia Bank, N.A. (In re Helmes), 336 B.R. 105, 109 (Bankr. E.D. Va. 2005).

did suggest an evidentiary hearing was warranted to prove her damages. At the end of oral

arguments, the Court took the matter under advisement.

II. JURISDICTION

This Court has authority to exercise jurisdiction over the subject matter and the

parties under 28 U.S.C. §§ 157(a), 1334, and the Order of Reference entered by the United States

District Court for the Western District of Pennsylvania on October 16, 1984. This is a core

proceeding under 28 U.S.C. § 157(b)(2).

III. DISCUSSION

A. Reopening a Bankruptcy Case

Under section 350(b), “[a] case may be reopened in the court in which such case

was closed to administer assets, to accord relief to the debtor, or for other cause.”30 The burden

is on the moving party to establish cause to reopen.31 The court enjoys broad discretion in

making this determination,32 but “[w]here it is futile or a waste of judicial resources to reopen the

case, including when the movant cannot ultimately obtain the substantive relief [sought], there is

no reason to grant the motion.”33

The need to enforce the discharge injunction is an appropriate reason to reopen a

closed case. Therefore, the Court should grant the Motion to Reopen if the Motion for Contempt

states a plausible violation of the discharge injunction. Without a violation to redress, there is no

need to reopen the case. The standard is akin to that of a motion to dismiss under Federal Rule

30 11 U.S.C. § 350(b).

31 Burnett v. Janocha (In re Janocha), No. BR 06-20191-JAD, 2015 WL 128152, at *2 (Bankr. W.D. Pa. Jan.

8, 2015) (citing In re Janssen, 396 B.R. 624, 634 (Bankr. E.D. Pa. 2008)).

32 See In re Lazy Days' RV Ctr. Inc., 724 F.3d 418, 423 (3d Cir. 2013); In re Zinchiak, 406 F.3d 214, 223 (3d

Cir. 2005).

33 Murphy v. U.S. Dep’t of Educ. (In re Murphy), 547 B.R. 875, 879 (Bankr. W.D. Pa. 2016).

of Civil Procedure 12(b)(6),34 with the Motion for Contempt serving as the functional equivalent

of a complaint.35 Since the operative facts are not in dispute, the question before the Court is one

of pure law.

B. The Discharge Injunction

Typically, “[w]hen a Chapter 7 debtor successfully completes his or her

bankruptcy case, the bankruptcy court . . . enters a discharge order releasing the debtor from

personal liability for most pre-bankruptcy debts.”36 This “discharge operates as an injunction

against a broad array of creditor efforts to collect debts as personal liabilities of the discharged

debtor.”37 Specifically, section 524(a)(2) prohibits “the commencement or continuation of an

action, the employment of process, or an act, to collect, recover or offset any such debt as a

personal liability of the debtor.”38 Because the Code does not explicitly provide a remedy for a

violation of the discharge injunction, courts have determined that it may be enforced through

civil contempt proceedings under section 105(a).39

To hold a creditor in civil contempt, the debtor must prove by clear and

convincing evidence:40 “(1) that a valid court order existed; (2) that the alleged contemnor knew

34 See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009).

35 See Fed. R. Bankr. P. 9014(a).

36 Zellner v. Lutz (In re Zellner), No. 5-15-BK-01286 RNO, 2020 WL 1181337, at *4 (Bankr. M.D. Pa. Mar.

11, 2020) (citing 11 U.S.C. § 727).

37 Joubert v. ABN AMRO Mortgage Grp., Inc. (In re Joubert), 411 F.3d 452, 456 (3d Cir. 2005).

38 11 U.S.C. § 524(a)(2).

39 Taggart v. Lorenzen, 139 S. Ct. 1795, 1801, 204 L. Ed. 2d 129 (2019); Englert v. Ocwen Loan Serv., LLC

(In re Englert), 495 B.R. 266, 271 (Bankr. W.D. Pa. 2013); In re Comensky, No. BR 12-23166-JAD, 2013

WL 1953300, at *2 (Bankr. W.D. Pa. May 3, 2013); Brown v. Bank of America (In re Brown), 481 B.R.

351, 357 (Bankr. W.D. Pa. 2012); Fonner v. Overdorf (In re Fonner), 262 B.R. 350, 358 (Bankr. W.D. Pa.

2001), subsequently aff’d, 47 F. App’x 178 (3d Cir. 2002); Penrod v. Arone (In re Penrod), 163 B.R. 62, 63

(Bankr. W.D. Pa. 1994).

40 Bonnanno v. HSBC Card Servs. (In re Bonanno), No. ADV 08-7035 BM, 2009 WL 8556815, at *6 (Bankr.

W.D. Pa. Mar. 24, 2009) (citing John T. ex rel. Paul T. v. Delaware County Intermediate Unit, 318 F.3d

545, 552 (3d Cir. 2002)).

of the order; and (3) that the contemnor disobeyed the order.”41 In Taggart v. Lorenzen, the

Supreme Court of the United States emphasized that obedience is generally an objective

standard, noting that subjective intent or an absence of willfulness will not insulate a party from

civil contempt.42 Nevertheless, civil contempt is inappropriate “where there is [a] fair ground of

doubt as to the wrongfulness of the defendant’s conduct.”43 This rule originates from the notion

that “principles of ‘basic fairness requir[e] that those enjoined receive explicit notice’ of ‘what

conduct is outlawed’ before being held in civil contempt.”44 Thus, “a court may hold a creditor

in civil contempt for violating a discharge order . . . if there is no objectively reasonable basis for

concluding that the creditor’s conduct might be lawful.45

To violate the discharge injunction, disobedience “require[s] some affirmative

collection efforts on the part of the creditor.”46 Indeed, while applicable to “a broad array of

creditor efforts to collect debts,”47 the discharge injunction “is not [a] lifelong shield against

other acts—including demands, threats, assertions of claims, and litigation—by those same

creditors, even where these other acts are undertaken wrongfully and in bad faith.”48 The

proscription targets the objective effect of the conduct (“to collect, recover or offset . . .”),49

meaning that even facially permissible acts may constitute de facto impermissible collection

41 In re Englert, 495 B.R. at 272; see Harris v. City of Philadelphia, 47 F.3d 1311, 1326 (3d Cir. 1995).

42 Taggart v. Lorenzen, 139 S. Ct. at 1802 (citing McComb v. Jacksonville Paper Co., 336 U.S. 187, 69 S.Ct.

497, 93 L.Ed. 599 (1949)). Subjective intent may nonetheless be relevant to determining an appropriate

sanction for the contemptuous conduct. Id.

43 Id. at 1801-02 (quoting California Artificial Stone Paving Co. v. Molitor, 113 U.S. 609, 618, 5 S.Ct. 618,

28 L.Ed. 1106 (1885)) (internal quotation marks omitted, emphasis in original).

44 Id. at 1802 (quoting Schmidt v. Lessard, 414 U.S. 473, 476, 94 S.Ct. 713, 38 L.Ed.2d 661 (1974)).

45 Id. at 1799.

46 In re Comensky, 2013 WL 1953300, at *4 (quoting In re Dendy, 396 B.R. 171, 179 (Bankr. D.S.C. 2008))

(internal quotation marks omitted, emphasis added).

47 In re Joubert, 411 F.3d at 456.

48 In re Schlichtmann, 375 B.R. 41, 97 (Bankr. D. Mass. 2007).

49 See 11 U.S.C. § 524(a)(2).

activity.50 To discern whether an act is one to collect a debt, courts consider whether the

creditor’s conduct objectively had the practical effect of improperly coercing payment of a

discharged debt.51 The analysis is context-specific and informed by the facts of the case.52

Essentially, the court is looking for “evidence of an effective connection between the conduct of

the creditor and the collection of the debt.”53

Objectively, credit reporting is an unusually agnostic function. Its primary

purpose is to share information relevant to making credit decisions,54 not modify the behavior of

a debtor. In fact, credit reports are not even communicated to their subjects directly. Yet it is

undeniable that the negative impact of a creditor’s derogatory report can bring significant

pressure to bear when discovered. And, of course, pressure naturally provokes action, so it is fair

50 See, e.g., Montano v. First Light Federal Credit Union (In re Montano), 493 B.R. 852, 859 (Bankr. D.N.M.

2013); Mahoney v. Washington Mutual, Inc. (In re Mahoney), 368 B.R. 579, 588-89 (Bankr. W.D. Tex.

2007).

51 See Roth v. Nationstar Mortgage, LLC (In re Roth), 935 F.3d 1270, 1276 (11th Cir. 2019) (“we first

determine whether a communication is a prohibited debt collection under section 524 by looking to whether

the objective effect of the creditor’s action is to pressure a debtor to repay a discharged debt.”) (internal

quotation marks omitted); Venture Bank v. Lapides, 800 F.3d 442, 448 (8th Cir. 2015) (the discharge

injunction bars a creditor acts which objectively influence or induce a debtor into repaying a discharged

debt); Paul v. Inglehart (In re Paul), 534 F.3d 1303, 1308 (10th Cir. 2008) (“the question is whether the

creditor's conduct had the practical, concrete effect of coercing payment of a discharged debt, and bad faith

is not required.”); Pratt v. GMAC (In re Pratt), 462 F.3d 14, 19 (1st Cir. 2006) (“In assessing violations of

the automatic stay and the discharge injunction, the core issue is whether the creditor acted in such a way as

to “coerce” or “harass” the debtor improperly.”); Krisiak v. Trumark Fin. Credit Union (In re Krisiak), 613

B.R. 606, 612 (Bankr. M.D. Pa. 2020) (“The discharge injunction may be violated by an act to collect a

discharged debt or an act that has the practical effect of coercing payment of a discharged debt.”); Zellner

v. Lutz (In re Zellner), No. 5-15-BK-01286 RNO, 2020 WL 1181337, at *4 (Bankr. M.D. Pa. Mar. 11,

2020) (quoting In re Paul, 534 F.3d at 1308).

52 Bates v. CitiMortgage, Inc., 844 F.3d 300, 304 (1st Cir. 2016) (quoting Diamond v. Premier Capital, Inc.

(In re Diamond), 346 F.3d 224, 227 (1st Cir. 2003)).

53 In re Mahoney, 368 B.R. at 589 (emphasis added). The court further opined that: “an act that is not, in any

objective sense, effective as a means of collection, recovery or offset should not count as an act proscribed

by the statute.” Id. at 588.

54 See In re Jones, 367 B.R. 564, 569 (Bankr. E.D. Va. 2007) (“The reporting of a delinquent debt to a credit

reporting agency is not inherently an act to collect a debt but rather to share information relevant to credit

granting decisions. A creditor reports both performing and delinquent accounts in the expectation that other

credit grantors will do the same, enhancing each creditor's ability to evaluate proposed credit transactions

and to avoid extending credit or making loans to poor credit risks.”).

to acknowledge that credit reporting at least broadly encourages the payment of debts.55 But this

level of influence is not inherently coercive or improper.56 Further complicating matters is that

credit reporting is generally permitted by statute notwithstanding a bankruptcy filing.57

None of this is to say that credit reporting cannot violate the discharge injunction

(or automatic stay).58 To the contrary, a substantial body of law has developed and there is

universal agreement that credit reporting can constitute an act to collect a debt. But to cast the

otherwise innately ambiguous act of credit reporting as something more coercive requires

evidence to objectively connect it to a collection activity.59 Although not required, other

55 In re Jones, 367 B.R. at 569-70.

56 To emphasize the difference, consider the following example. Prior to receiving a discharge, a debtor

borrowed money from a close friend. Upset that the loan will never be repaid, the friend no longer

socializes with the debtor. The debtor, unhappy with the cold shoulder and knowing that repayment would

smooth things over, feels pressure to repay the friend despite the discharge. Although the decision to cut

ties with the debtor over the debt may ultimately coax the debtor into doing so, the friend’s conduct cannot

be said to be improperly coercive towards that end.

57 See 15 U.S.C. § 1681c(a)(1) (prohibiting consumer reporting agencies from reporting bankruptcy cases for

“more than 10 years” after the “date of entry of the order for relief or the date of adjudication”) (emphasis

added); Mortimer v. JP Morgan Chase Bank, Nat. Ass’n, No. C 12-1936 CW, 2012 WL 3155563, at *3

(N.D. Cal. Aug. 2, 2012) (“While it might be good policy in light of the goals of bankruptcy protection to

bar reporting of late payments while a bankruptcy petition is pending, neither the bankruptcy code nor the

[Fair Credit Reporting Act] does so.”).

58 The standard for detecting collection activities under the automatic stay and discharge injunction are

similar enough that all the cases addressing credit reporting are relevant and persuasive in either context.

See Keller v. New Penn Financial, LLC (In re Keller), 568 B.R. 118, 123 (B.A.P. 9th Cir. 2017).

59 See Todt v. Ocwen Loan Servicing, Inc. (In re Todt), 567 B.R. 667, 680 (Bankr. D.N.H. 2017) (reporting

false or outdated information in an attempt to coerce payment of a discharged debt can violate the discharge

injunction); In re Franklin, No. 09-13399-JMD, 2017 WL 3701214, at *7 (Bankr. D.N.H. Aug. 24, 2017)

(“Notably, a majority of courts hold that the postpetition reporting of overdue or delinquent payments to

credit reporting agencies, without intent to harass or coerce payment, is not a per se violation of the

automatic stay.”); Henriquez v. Green Tree Serv., LLC (In re Henriquez), 536 B.R. 341, 349 (Bankr. N.D.

Ga. 2015) (“When the credit reports clearly indicate that the Plaintiffs owe nothing on the Loan and that it

was discharged in bankruptcy, it does not appear that the Defendant is coercing or pressuring the Plaintiffs

to pay anything.”); In re Zine, 521 B.R. 31, 40 (Bankr. D. Mass. 2014) (“Typically courts require creditor

reporting to be coupled with other acts, such as substantial contacts by telephone or mail, to evidence that it

was done to coerce payment from the debtor”); Giles v. Nutter & Co. (In re Giles), 502 B.R. 892, 904

(Bankr. N.D. Ga. 2013) (“Nutter proved that its purpose in making such reports to credit reporting agencies

had nothing to do with the collection of note payments from Mrs. Giles as her personal liability.”); In re

Montano, 493 B.R. at 859 (“an alleged credit reporting practice was facially permissible, but could

nevertheless violate the discharge injunction if its objective effect is prohibited, i.e. if it really serves to

pressure the debtor to pay a discharged debt.”) (internal quotation marks omitted); In re Mahoney, 368 B.R.

at 592-94 (no evidence of link between post-discharge credit reporting and collection of debts); In re Jones,

collection activity helps to place the credit report in context.60 Similarly, a refusal to change a

knowingly inaccurate report may suggest that the creditor is seeking to collect a debt.61 Beyond

these situations, “[i]t is largely a matter of the court knowing [coercion] when it smells it.”62

367 B.R. at 570 (“But where the action complained of does not on its face constitute an act to collect a

debt, the burden is on the debtor to show that the creditor took the challenged action for the specific

purpose of collecting a discharged debt.”); In re Lohmeyer, 365 B.R. 746, 747 (Bankr. N.D. Ohio 2007)

(“the key reasoning applicable to the current case is the possibility that simply reporting a debt may be a

violation of the discharge injunction depending on the purpose and circumstances of the report.”); In re

Helmes, 336 B.R. at 109 (“the debtor failed to show that submitting the derogatory report to the credit

reporting agency or allowing it to remain in the debtor's credit record was an act intended to collect a

debt.”); Smith v. Am. Gen. Fin., Inc. (In re Smith), No. 00-02375, 2005 WL 3447645, at *3 (Bankr. N.D.

Iowa Dec. 12, 2005) (“There is some precedent for the finding of a violation of the discharge injunction

from a credit report notation made with the intent to collect a debt.”); Irby v. Fashion Bug (In re Irby), 337

B.R. 293, 295 (Bankr. N.D. Ohio 2005) (“if the act of reporting a debt was undertaken for the specific

purpose of coercing the debtor into paying the debt, a violation of the discharge injunction could be

established.”); In re Miller, No. 01-02004, 2003 WL 25273851, at *2 (Bankr. D. Idaho Aug. 15, 2003)

(“Debtor has not shown that Equifax has any interest in the recovery or collection of the debts listed in its

report”); Vogt v. Dynamic Recover Servs. (In re Vogt), 257 B.R. 71 (Bankr. D. Colo. 2000) (“False

reporting, if not done to extract payment of the debt, is simply not an act proscribed by [section 524(a)(2)]

of the Code.”); In re Thistle, No. 96-17127-SSM, 1998 WL 35412015, at *7 (Bankr. E.D. Va. July 17,

1998) (“a black mark on a credit report will generally, by the very nature of things, have a coercive or

harassing effect.”).

60 See Bibolotti v. American Home Mortgage Servicing, Inc., 2013 WL 2147949, at *14 (E.D.Tex. May 15,

2013) (“The Court finds that in this case, the continuous credit reporting, combined with the constant

communications regarding ‘loss mitigation’ options, and the ARM Notices that continued to remind

Plaintiff of the changing interest rate, payment amount, payment due date, and the outstanding principal

balance due, that this is a larger course of conduct intended by Defendants to coerce Plaintiff into

‘voluntarily’ making payments or entering into a loan modification or other repayment plan with

Defendants. In addition, the Court finds that these acts are likely effective as measures to collect on the

debt.”); In re Zine, 521 B.R. at 38 (“alleged violative acts need not be viewed in isolation, but also should

be considered under the totality of the circumstances to discern whether they evidence a pattern of coercive

behavior.”); In re Irby, 337 B.R. at 295 (Bankr. N.D. Ohio 2005) (“But since the act, itself, does not violate

the discharge injunction, the reporting of the debt will not likely run afoul with the discharge injunction

unless it is also coupled with other actions undertaken by the creditor to collect or recover on the debt.”); In

re Goodfellow, 298 B.R. 358, 362 (Bankr. N.D. Iowa 2003) (finding a violation of the automatic stay and

discharge injunction based on creditor’s reporting of the debtor's debt as “past due” in addition to its

collection letters and threatening phone calls to debtor attempting to collect the debt); Weinhoeft v. Union

Planters Bank, N.A. (In re Weinhoeft), No. 00-7072, 2000 WL 33963628, at *1 (Bankr. C.D. Ill. Aug. 1,

2000) (creditor “(i) continuously reported Debtors as delinquent on their mortgage payments to credit

reporting agencies, (ii) allowed the publication of notices of delinquent taxes in the local newspaper citing

Debtors as owners of the residence, (iii) contacted Debtors regarding property insurance and making future

mortgage payments, (iv) attempted to collect a portion of its debt under a proposed “Agreement for Deed”,

and (v) filed a foreclosure complaint naming Debtors as defendants”); but see In re Todt, 567 B.R. at 680

(despite finding other communications violated the discharge injunction, debtors failed to demonstrate the

inaccurate credit report was made in an attempt to coerce the payment of a debt).

61 See Carriere v. Proponent Fed. Credit Union, No. CIV.A.03-1894, 2004 WL 1638250, at *1 (W.D. La. July

12, 2004) (debtor stated a claim where the information was repeatedly disputed through Experian but the

issue was not corrected); Russell v. Chase Bank USA, N.A. (In re Russell), 378 B.R. 735, 743 (Bankr.

E.D.N.Y. 2007) (“one may, at least in the context of a motion to dismiss, infer an intent to collect a

To be sure, inaccurate reports, particularly those updated post-discharge, are

suspect.63 The Debtor cites two decisions, In re Torres and In re DiBattista, for the proposition

that “courts have had no difficulty recognizing that false or outdated reporting to credit reporting

agencies, even without additional collection activity, can constitute an act to extract payment of a

debt in violation of section 524(a)(2).”64 That statement is true, but is much less meaningful than

it sounds. Basically, it is simply an acknowledgment that some older cases have found that

claims based solely on inaccurate credit reporting were sufficiently pled to survive a motion to

dismiss. More critically, however, each of the cases cited in support of that statement applied a

low “no set of facts” standard under Conley v. Gibson,65 which was abrogated by the heightened

“plausibility” standard announced in Bell Atl. Corp. v. Twombly.66 In other words, those cases

would likely be decided differently today.

Still, In re DiBattista, a decision from only a year and a half ago, found this

authority persuasive when it upheld the bankruptcy court’s finding of a violation of the discharge

discharged debt from Chase's refusal to comply with Russell's request to correct his credit information.”);

In re Jones, 367 B.R. at 570 (Bankr. E.D. Va. 2007) (“if a creditor, having been informed of the problem,

inexplicably fails to take corrective action, a debt collection motive may be inferred (particularly where the

creditor fails to respond to the motion to reopen alleging such a motive).”); In re Torres, 367 B.R. at 489

(“Chase has not articulated any valid reason for refusing to correct its outstanding report. Its refusal, at this

point, obviously is not a matter of inadvertence”); In re Lohmeyer, 365 B.R. at 747 (“If Plaintiff Philip

Lohmeyer can prove that Defendant inaccurately reported or failed to update the status of the debt as a

current liability of Plaintiff’s . . . for the purpose of coercing payment by Plaintiffs notwithstanding the

discharge, which would essentially amount to lying in passive wait, then in this court’s view a violation of

the discharge injunction will have occurred without other overt collection action”).

62 In re Vogt, 257 B.R. at 70.

63 In re Zine, 521 B.R. at 40 (“A post-discharge negative change to the credit report heavily suggests that

Bayview sought to collect a discharged debt from the Debtor.”).

64 In re Torres, 367 B.R. at 486; see In re DiBattista, 615 B.R. at 43 (quoting In re Torres).

65 Conley v. Gibson, 355 U.S. 41, 45, 78 S. Ct. 99, 102, 2 L. Ed. 2d 80 (1957) (“a complaint should not be

dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of

facts *46 in support of his claim which would entitle him to relief.”).

66 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007).

injunction. Indeed, the district court quoted In re Torres’ conclusions about false credit reporting

with approval in its analysis:

[A] credit report that continues to show a discharged debt as

“outstanding,” “charged off,” or “past due” is unquestionably inaccurate

and misleading, because end users will construe it to mean that the lender

still has the ability to enforce the debt personally against the debtor, that

is, that the debtor has not received a discharge, that she has reaffirmed the

debt notwithstanding the discharge, or that the debt has been declared non-

dischargeable.67

Noting that the bankruptcy court adopted a similar reasoning, the district court held that

[a] credit report that continues to show an amount past due, especially one

that was prepared only after the discharge order, is inaccurate and

misleading in a way that causes real harm, and that alone can constitute a

violation of a discharge order.68

Despite the breadth of that holding, the district court emphasized that the creditor’s misleading

credit reporting was in fact coupled other communications to the debtor, “suggesting it was in

fact trying to collect a debt.”69

To the extent that In re DiBattista holds that the harm caused by a misleading

post-discharge credit report can alone establish a violation of the discharge injunction, the Court

respectfully disagrees. The discharge injunction only prohibits acts to collect a discharged debt

as a personal liability of the debtor.70 The harm caused by a misleading report is simply not

dispositive as to whether the act had the practical effect of improperly coercing the payment of a

discharged debt. It is certainly a relevant consideration, as is the inaccuracy of the report, but the

Court fails to see how those factors alone reflect “an effective connection between the conduct of

67 In re DiBattista, 615 B.R. at 43 (quoting In re Torres, 367 B.R. at 487–88).

68 Id. at 43 (emphasis added).

69 Id.

70 11 U.S.C. § 524(a)(2).

the creditor and the collection of the debt.”71 In fact, reliance on the ensuing harm seemingly

moves the analysis away from the question of coercion in favor of a per se rule, which has

already been widely rejected by the courts.72

C. Analysis

Having reviewed the motions under the applicable standards, the Court concludes

that the Motion for Contempt does not state a plausible claim for a violation of the discharge

injunction. While there is no dispute that the discharge entered here is a valid court order or that

Clearview was aware of it, the facts alleged do not establish Clearview’s disobedience. The

Court stresses that this conclusion rests solely on a review of the Motion for Contempt and does

not consider the declarations attached to Clearview’s response.

The fundamental problem with the Motion for Contempt is that it does not draw

an “effective connection” between the inaccurate credit report and collecting the underlying debt.

Instead, it silently relies on In re DiBattista’s assertion that harmful and misleading credit

reporting alone can violate the discharge injunction. But neither the harm, nor the inaccuracy of

the report, nor the fact that it occurred post-discharge objectively show an act to improperly

coerce the Debtor to pay a discharged debt. To the contrary, the Court observes that while it is

inaccurate to report discharged debt as “charged off,” such a notation literally means that the

debt was written off as uncollectable by the creditor. Therefore, it appears that the alleged

71 In re Mahoney, 368 B.R. at 589 (emphasis added).

72 Only one sharply criticized decision suggests that all credit reporting is per se an act to collect debt. In re

Sommersdorf, 139 B.R. 700, 701 (Bankr. S.D. Ohio 1991) (“We find that the latter most certainly must be

done in an effort to effect collection of the account. . . Such a notation on a credit report is, in fact, just the

type of creditor shenanigans intended to be prohibited by the automatic stay.”); but see In re Mahoney, 368

B.R. at 586 (“The rhetoric in Sommersdorf writes checks that the authorities cannot cash. While it may

have been true in Sommersdorf—as a factual matter—that the creditor intended to spur collection of the

debt when affirmatively placing an entry in the co-obligor’s credit report, it is too great a leap to say, as a

matter of law, that the mere reporting of a debt to a credit agency is a per se violation of the discharge

injunction.”); see also In re Keller, 568 B.R. at 122-26 (collecting cases rejecting Sommersdorf’s per se

view of credit reporting).

violation, which was not communicated to her directly, at least facially signals an end to active

collection efforts by that creditor. Under the circumstances, the Debtor needed to point to

something more substantial to suggest objectively improper coercion. Ultimately, she conceded

that there was nothing else to her claim beyond the crediting reporting itself. In truth, the

undisputed facts undermine any hint of coercion because Clearview simultaneously reported the

two real debts accurately, and only contacted the Debtor in response to the demand letter to

advise her of their corrective steps. Accordingly, the Court finds that the Debtor has not

sustained her burden to state a plausible claim for relief under section 524(a)(2).

To be clear, the Court does not hold that credit reporting must be paired with

other collection activity to violate the discharge injunction. The Court agrees, for example, that

an inaccurate credit report could be an act to coerce payment if the creditor knowingly refuses to

correct it to reflect the discharge.73 That said, the Court generally recognizes the practical

challenge to painting a credit report as an act to collect debt, even when materially inaccurate,

without other circumstantial evidence. But even when inaccurate reporting is not violative of the

discharge injunction, an aggrieved debtor may still have other remedies.74

For all these reasons, the Court finds that reopening the case would be futile

because the Debtor cannot prevail on the Motion for Contempt.

IV. CONCLUSION

Considering the foregoing, the Motion to Reopen must be denied, rendering the

Motion for Contempt moot. This opinion constitutes the Court’s findings of fact and conclusions

73 In the present case, the Debtor did not allege facts to support the conclusion that Clearview refused to

correct the adverse report. Instead, she only states (without elaboration) that she disputed the report with

Experian, and that Clearview did not amend the report to reflect the discharge. Additionally, given that the

Debtor addressed her demand letter to the Chairperson rather than person identified in Fed. R. Bankr. P.

7004(h), the Court cannot infer refusal from Clearview’s delayed response.

74 See, e.g., 15 U.S.C. §§ 1681n, 1681o.

of law in accordance with Fed. R. Bankr. P. 7052. The Court will issue a separate order

consistent with this opinion.

ENTERED at Pittsburgh, Pennsylvania.

Wi * sjb

Dated: September 7, 2021 GREGORY L. TADDONIO

UNITED STATES BANKRUPTCY JUDGE

Case administrator to mail to:

Debtor

Mary Bower Sheats, Esq.

Matthew E. Kaslow, Esq.

Roy W. Arnold, Esq.

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