The Maine Bankruptcy Court issued a decision on July 12, 2012, in the case of Collins v. Marix Servicing, LLC, in which Andrea Bopp-Stark of Molleur Law Office represented the Collins'. The Court held that Marix Servicing, LLC violated the discharge injunction by sending 8 letters to the Collins' after they lost their home in foreclosure and after the discharge injunction. The Collins' filed Chapter 7 in April 2008. During the Collins' Chapter7 bankruptcy case, they surrendered their real estate to the mortgagee. The mortgagee obtained a foreclosure judgment in October 2008, and the period of redemption expired by the end of January 2009. The Collins' received their bankruptcy discharge in July, 2008.
Marix acquired the mortgage servicing rights in October, 2010 and learned of the Collins' bankruptcy discharge the same day. Marix then sent a series of letters to the Collins' regarding the "validation of the debt", the transfer of the loan, the amounts due under the note, information about future mortgage payments, assignments, alternatives to foreclosure, and property insurance. Marix claimed the letters were mandated by other federal or state laws and, therefore, not a discharge injunction violation.
The Court concluded that the Collins' interest in the property had extinguished with the expiration of the foreclosure redemption period and the Collins' personal liability had been extinguished by the issuance of the discharge injunction. Since the Collins' had no personal or in rem rights regarding which Marix could assert a right to send the letters, the Court held that Marix's letters violated the discharge injunction by objectively coercing and harassing the Collins' to repay a debt for which the Collins' were not responsible. This is a very important case supporting debtors' rights to be free from creditor misbehavior. A hearing on damages will be scheduled by the Court later this summer or early fall 2012.