Judge Awards $80K Damages against Bank of America

[justbroke]

Wow, a judge in the Middle District of Florida just yesterday, awarded $80K in damages to the Debtor plus attorney fees of $2K. It stemmed from BofA not stopping collection calls after the discharge. The poor debtor documented 79 calls after her attorney notified BofA to stop the calls! Additionallly, BofA sent a dunning letter as well demanding payment! No statements were sent, which makes this odd. BofA was found to have violated the permanent discharge injunction found in 11 USC 524(a).

BofA did not respond to the Order Directing Response and didn't show up at the hearing. Of course, service was questioned, but the (service) addresses were quickly validated against other cases in the same District! (The verification also included the Matrix and other service to BofA.)

The Judge awarded "damages" of $1,000 for each call and $1,000 for the letter for a total of $80,000 in damages. The Judge went on to say that these are "regular" damages and that if BofA calls one more time or duns the debtor one more time, then "significant punitive" damages would be awarded. (Noting that punitive damages are usually 2:1 in the 11th Circuit... so BofA could be making a $160,000 call real soon now!)

I love this type of judge!

[df04527]

Awesome! Love it

[DeadManCrawling]

JB,

That IS awesome. Middle District in FL is a funny place. I filed CH 7 here a few years ago, and it is, to say the least, unique.

However, I hope this signals a greater attempt to give debtors the true legal relief they are entitled to. What good is a law if no one follows it? Unfortunately, though, the debtors in most cases won't see any of this money. It goes into the BK estate to be distributed to creditors. Probably, in this case, BoA is receiving some of its own money back from the fine.

That strikes me as wrong.

[ValleYum]

Hi DMC.

Why would do you think it would go back to the bankruptcy estate? Wasn't the penalty/judgment assessed for actions occurring after they were discharged? I am just curious.

[justbroke]

This was a Chapter 7 case. The judge ordered the sanctions paid to the Debtor along with $2,000 in attorney fees. It did not go into the bankruptcy estate since it is post-petition and the cause of action arose after the filing of the petition.

[tobee43]

this is GREAT! i hope it begins to happen more and more. although these banks never stop, they believe they are above the law and usually are. GREAT judge!

[justbroke]

Without the discharge injunction, the entire process means nothing. Creditors need to take heed to what the discharge actually means. This judge, who is also the chief judge for the District, gets it. She even stated that it's not common for this to happen and she doesn't dole out damages so easily and readily, but this case was particularly egregious.

[tobee43]

Without the discharge injunction, the entire process means nothing. Creditors need to take heed to what the discharge actually means. This judge, who is also the chief judge for the District, gets it. She even stated that it's not common for this to happen and she doesn't dole out damages so easily and readily, but this case was particularly egregious.

yet we are just discussing this in another thread in reference to collecting on a deficiency (actually in reference to the mortage relief act) and i know florida is in fact one of the those states that they are allowed to collect or go after a deficiency? so this is really very interesting that the bank still was unable to attempt to collect.

so my question jb is does the permanent discharge injunction, in fact prevent the bank from attempting to collect on a deficiency?

[justbroke]

I can only say it this way. A discharged debt is a discharged debt (period). You cannot collect or use process to collect discharged debt. Deficiency would not occur for a debtor who obtained a discharge. The lender could not pursue the debt. The discharge basically makes the debt non-recourse.

As Congress put it in the legislative history on the discharge injunction (in 524(a)), "... to cover any act to collect, such as dunning by telephone or letter, or indirectly through friends, relatives, or employers, harassment, threats of repossession, and the like... and is intended to insure that once a debt is discharged, the debtor will not be pressured in any way to repay it. In effect, the discharge extinguishes the debt, and creditors may not attempt to avoid that.” House and Senate Notes on History of 11 USC 524(a) the Discharge Injunction

(Citation: H.R. Rep. No. 595, 95th Cong., 1st Sess. 363-64 (1978); S. Rep. No. 959, 95th Cong., 2d Sess. 80 (1978).)

[tobee43]

I can only say it this way. A discharged debt is a discharged debt (period). You cannot collect or use process to collect discharged debt. Deficiency would not occur for a debtor who obtained a discharge. The lender could not pursue the debt. The discharge basically makes the debt non-recourse.

As Congress put it in the legislative history on the discharge injunction (in 524(a)), "... to cover any act to collect, such as dunning by telephone or letter, or indirectly through friends, relatives, or employers, harassment, threats of repossession, and the like... and is intended to insure that once a debt is discharged, the debtor will not be pressured in any way to repay it. In effect, the discharge extinguishes the debt, and creditors may not attempt to avoid that.” House and Senate Notes on History of 11 USC 524(a) the Discharge Injunction

(Citation: H.R. Rep. No. 595, 95th Cong., 1st Sess. 363-64 (1978); S. Rep. No. 959, 95th Cong., 2d Sess. 80 (1978).)

this explains it perfectly jb!! i was trying, and just needed the clarification about the way a deficiency is treated after a bk was discharged. thanks for the clarification!

[msm859]

I can only say it this way. A discharged debt is a discharged debt (period). You cannot collect or use process to collect discharged debt. Deficiency would not occur for a debtor who obtained a discharge. The lender could not pursue the debt. The discharge basically makes the debt non-recourse.

As Congress put it in the legislative history on the discharge injunction (in 524(a)), "... to cover any act to collect, such as dunning by telephone or letter, or indirectly through friends, relatives, or employers, harassment, threats of repossession, and the like... and is intended to insure that once a debt is discharged, the debtor will not be pressured in any way to repay it. In effect, the discharge extinguishes the debt, and creditors may not attempt to avoid that.” House and Senate Notes on History of 11 USC 524(a) the Discharge Injunction

(Citation: H.R. Rep. No. 595, 95th Cong., 1st Sess. 363-64 (1978); S. Rep. No. 959, 95th Cong., 2d Sess. 80 (1978).)

So can a creditor refer a matter to collections after you file (and you filed before you even received a bill from the creditor) and then have the collection agency show a collection account on your credit report?

[justbroke]

So can a creditor refer a matter to collections after you file (and you filed before you even received a bill from the creditor) and then have the collection agency show a collection account on your credit report?

No. I actually just had one of these occur and the JDB (junk debt buyer), after being warned about violating the discharge injunction, has removed the entry from my credit report.

Let me make this clearer. Nothing would stop them from actually doing it. However, doing so would be a violation of the automatic stay (if case was just filed and not closed) and the discharge injunction (if the case is discharged). I have found that what should happen... never really does!

[spidge]

Here's my number 555-5555. Please call any time.

[goturtlego]

Wow! That's great work right there!