Repeated Attempts By Lenders At Collecting Discharged "Zombie" Mortgage Debt Forces Texas Consumer To Sue

In League City, Texas, the Houston Chronicle reports:

• Bankruptcy is supposed to get rid of bad pennies. Prince Ella Green thought so. She and her husband, James, who live in League City, fell on hard times and filed bankruptcy in 1995. The case was a Chapter 13, meaning the Greens submitted a plan for repaying most of their debt, which they did during the next five years.

• Some debt, including a mortgage on a home in Texas City that the Greens bought as an investment property and later lost to foreclosure, was discharged as part of the bankruptcy, according to court records. In other words, a judge ruled that the mortgage was debt the Greens were not legally responsible for paying.

• Tell that to Cenlar Federal Savings Bank and several other companies that have been trying to collect the debt ever since.

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• Tired of battling the zombie debt for more than a decade, the Greens went on the offensive. In February, they sued all three mortgage companies that had attempted to collect the debt, accusing them of, among other things, deceptive trade practices and violating federal bankruptcy and debt collection laws.

• "I decided I'm not going to take this lying down," Green said. "It's not just me. It's happening all over America." As more Americans struggle with mounting debt, they're finding that, like bad pennies, sometimes the debt never goes away.

For more, see Zombie debts refuse to die.

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