Automatic stay violations - what counts?

[SweetGeorgia]

Do creditors even notice bankruptcy filings these days? I have had minor violations like phone calls and letters, but I'll let those go. A big violation from a creditor's attorney who refused to dismiss bank and wage garnishments. I am going after that one because she lied to me in writing, misrepresented the law, I'm still not whole and damages are still accruing.

I have another one that I'm not sure about. It is a deficiency lawsuit on an multi-unit building we lost last year. It was filed against the LLC and my husband personally. The creditor's attorney filed a motion for default judgment against both the LLC and my husband, but there's a footnote saying that he's in bankruptcy and action is stayed toward him.

I want the attorney to dismiss the case against my husband. He can pursue the default judgment against the LLC, for whatever good that will do him.

If that judgment is recorded, no one will ever see the footnote. It will look like a post-filing judgment debt. Even if the creditor doesn't pursue it, I bet it would mess with our credit and LOOK like a big honking debt we still owe. I'd like to nip this in the bud. Thoughts?

I ask because our attorney doesn't do the violation cases. I want to have my ducks in a row when I talk to a new attorney, and I would need to get this filed pretty quickly.

[nceguyfromne]

Technically, ANY collection activity (including phone calls and letters) during the automatic stay is considered a violation of the stay. What makes it actionable is that it was done willfully, in spite of the court's notice. If the actions only occurred very close to the mailing date, it would probably be a tough sell. However, if it continues weeks later, you would have a definite case. It would be the creditor's burden to prove that notice was NOT received. The court will not simply accept that it got lost in the mail or entangled in bureaucracy, so the creditor had better be able to show they are no longer at the address the notice was mailed to.

Assuming you get this far, the judge will grant you reasonable costs and attorney's fees. To receive punitive damages, you will need to prove actual damages. Aggravation or emotional distress will not result in punitive damages, but garnishments or money otherwise lost as a result of their actions likely would.

Best of luck!

[nceguyfromne]

Sorry, I posted the same response twice.

[nceguyfromne]

By the way, my information is based on court decisions in my district. People win automatic stay cases against creditors all the time. Most people just don't follow through on holding creditors accountable for their unlawful actions.

[tcreegan]

Hi SweetGeorgia,

Document anything that smells of a stay violation, get an up-and-coming lawyer and go after them!!

That deal with the judgement looks like a serious violation. Judges have been pretty generous to debtors (and plus legal fees)

You need to follow up on the judgement, have your lawyer get the judgement dismissed or vacated. And make sure it is not on your credit report. Write letters until they remove it.

Go get em for stay violations !!

Tom in Colo

[SweetGeorgia]

The standard for "wilful violation" in my district is just: Did the creditor know about the bankruptcy and did they act voluntarily? That's it. They don't need to have meant to violate the stay. The case is In Re Roche, and it seems to me that bankruptcy judges here are just itching to slap creditors for stay violations.

The one attorney who continued garnishing the bank account and the wages really did cause some serious damage. Late fees, disconnect fees, bounced check charges, of course. The loss of a life insurance policy. Not being able to get my blood pressure medication or see my cardiologist. It's stressful to beg the utilities for more time, or my family for some help (and to learn that they won't). We nearly lost my mother's storage things, scraping up the money the same day as the auction - just her hope chest, family photos, my wedding dress, but valuable to her.

That attorney knew about the exempt status of the bank funds before she seized a penny. She knew about the bankruptcy 12 hours after it was filed. She filed a Notice of Stay with the court, which did no good with the garnishments, and she knew that as soon as I did. Three weeks after we filed, she finally agreed to dismiss - and then never did it! She whined that she "had no obligation" to do that; she's wrong and ought to do her homework.

Whew. Needed to vent and articulate some thoughts - thanks for the input!

[tobee43]

Whew. Needed to vent and articulate some thoughts - thanks for the input!

yes, and you did that quite well.