Can you sue a collection agency who continues to report a debt as a debt in collection even though it was discharged in chapter 7 four years ago?

First, make sure you have documented proof that shows the account was discharged. If you haven't filed a dispute. You should then report them under the Fair Debt Collection Act for unfair reporting. If, after that, they still report and account and you can prove otherwise, you should look into an attorney who can file suit for you. Rest assured they'll have five lawyers for every one you find.