Creditor Fails to Comply with Law

In a lawsuit filed on May 10, 2011, by Clay Daniel Burch, Plaintiff, against Bank of America, Defendant, Burch proved the Defendant repeatedly failed to regard the U.S. Bankruptcy Court automatic stay and discharge injunction. The hearing court rendered its decision on July 27, 2011, in favor of the Plaintiff and awarded Burch $5, 105.05 in compensatory damages, and $12,000 in punitive damages. The reason the Plaintiff was awarded the judgment is because he proved the creditor failed to comply with the law.

Filing bankruptcy initiates an automatic stay. The automatic stay, applicable to all types of bankruptcies, stops certain lawsuits, foreclosures, utility shut-offs, evictions, repossessions, garnishments, attachments, and debt collection harassment. After the initiation of the bankruptcy, creditors must go through a U.S. Bankruptcy Court trustee to deal with their debtors.

According to the judge’s order concerning the violation of the automatic stay in the Burch case, “The Plaintiff, an individual, presented evidence that the Defendant received notice of his Chapter 7 Bankruptcy case when it was filed; despite this notice, Defendant repeatedly attempted to contact Plaintiff, both by telephone and by mail. The costs the Plaintiff ultimately incurred were due to actions taken by Defendant after the Plaintiff received his discharge; however, the mere violation of the automatic stay constitutes an injury to the debtor inasmuch as the creditor’s violation restricts the debtor’s breathing spell and subjects the debtor to continued collection efforts, possibly including harassment and intimidation.”

Due to the disregard of the bankruptcy discharge injunction, “The evidence presented at the hearing on Plaintiff’s Motion is sufficient to establish civil contempt on the part of Defendant. Defendant had notice of Plaintiff’s bankruptcy and his discharge, as evidenced by the Court’s records. Defendant also received notice at multiple addresses of hearings held in this adversary proceeding; however, Defendant ignored all notices it received regarding Plaintiff’s bankruptcy case, with the exception of the complaint it received from the Department of Consumer Affairs. The events of which Defendant received notice were in Plaintiff’s favor, as he, in filing and completing his bankruptcy case, received the protection of the automatic stay and relief from personal liability on his debt upon discharge. Defendant violated the discharge injunction by repeatedly contacting Plaintiff after his discharge in attempts to collect its debt from him personally. Finally, Plaintiff suffered harm as a result of Defendant’s actions. Plaintiff was forced to spend time and money to stop Defendant from attempting to collect on a debt for which Plaintiff was no longer liable. Plaintiff endured months of harassing letters and telephone calls. Plaintiff had to hire an attorney, miss time from work, and drive over 600 miles to prosecute this Motion. Plaintiff has met the elements to show civil contempt by Bank of America.”

U.S. Bankruptcy Courts unfavorably view creditors who disregard bankruptcy laws. Filing for bankruptcy is a legal proceeding designed to protect both creditor and debtor and to allow the honest person a fresh start.

Do you need a fresh start? Have you considered bankruptcy? If you need relief from the stress associated with debt and you live in or around the metropolitan areas of Youngstown or Warren, Ohio, contact us at .We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.

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