In re Vogt

Ronald and Gwendolyn Vogt (plaintiffs) filed for bankruptcy in 1994. At the time of the Vogts’ bankruptcy filing, they had an outstanding debt to Dallas Leasing (Dallas). After the bankruptcy filing, Dallas assigned its claim against the Vogts to Dynamic Recovery Services (Dynamic) (defendant). The Vogts’ debts were subsequently discharged in the bankruptcy, and the bankruptcy case was closed. However, years later, the Vogts applied for a home-mortgage loan and were told that Dynamic was asserting that the Vogts’ debt to Dallas was still outstanding. Because of that allegedly outstanding debt, the Vogts were denied the mortgage loan. The Vogts contacted Dynamic to explain that the Dallas debt had been discharged in the bankruptcy. Dynamic told the Vogts that it would correct the information about the debt if the Vogts paid Dynamic the $2,582 debt they purportedly owed. The Vogts paid Dynamic because they did not want to lose their ability to obtain a home loan. Although the Vogts eventually obtained a loan, they claimed that Dynamic had still failed to modify the information about their credit and that, as a result, they had incurred additional closing costs and fees and had to pay a higher interest rate. The Vogts had no evidence supporting the assertion that Dynamic never corrected the credit information. The Vogts brought an adversary proceeding against Dynamic in bankruptcy court, asserting that Dynamic had violated 11 U.S.C. § 524(a)(2)’s injunctive provision preventing a creditor from acting to collect a discharged debt as a personal liability of the debtor.