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Bankruptcy
: The BK BlawgAn Automatic Stay Violation Case that is Hard to Believe
Search the term "stay violation" on any consumer bankruptcy blog and you will find stories of situations where creditors get hit with well deserved sanctions for their failure to stop harassing a debtor despite knowledge of a bankruptcy filing.?? Despite the trend in the law to give creditors more protections, bankruptcy judges are generally extremely protective of debtors when it comes to automatic stay violations.???? The automatic stay functions as the core protection of bankruptcy and creditors violate the stay at their peril.
Unfortunately, however, bad facts truly do make bad law.?? Now we have a case where a sincere, well-intentioned creditor is being hit with sanctions for what appear to be innocent actions against a debtor with less than clean hands.???? The case involves a Connecticut homeowner named Mark Poveromo who got slammed for sanctions after he pursued criminal sanctions against a dishonest contractor who used a bad address for Mr. Poveromo in this Missouri bankruptcy filing.?? You can read the details of this story in an AP news release called Bankruptcy Judge Orders Victim to Pay Back Thief.
I suspect that most objective observers would conclude that creditor Poveromo was the wronged party here, after being ripped off by his contractor, spending money for two plane tickets and dealing with a judge who refused to let him appear telephonically.?? Nevertheless, this case shows how seriously bankruptcy judges treat stay violations even in situations where the debtors are very unsympathetic.
A bigger concern, however, is the likelihood that creditor advocates will use cases like this one to push Congress to erode automatic stay protections.?? My experience has been that most stay violation cases involve bullying creditors and fact patterns like the one in this case are rare.?? I will not be surprised to see efforts by lawmakers to reduce automatic stay protections.
Full post as published by The BK Blawg on September 24, 2008 (boomark / email).
What's the Bankruptcy Automatic Stay
You’ve probably heard the phrase “bankruptcy protection”, but do you know how filing for bankruptcy could actually protect you? The bankruptcy automatic stay offers one of the major protections in a bankruptcy case...
When Does the Automatic Stay Terminate
Once imposed, automatic stay requiring a stop to almost all debt collection activity against the debtor and his property remains in effect until the earliest of the following events: 1...
Debt Collector's Unlawful Message on Answering Machine May Give Rise to Stay or Discharge Violation Action
Over the past few months, I have received a number of calls from former clients regarding possible discharge stay violation actions.?? As you may know, if you successfully complete your Chapter 7 or Chapter 13 case, the judge will issue a discharge order...
Motions for Relief from The Automatic Stay: 30 Day Requirement
Motions for relief from the automatic stay enjoy the benefit of expedited treatment by bankruptcy courts. Under Section 362(e) of the Bankruptcy Code, when someone, such as a mortgage servicer, files a motion to lift the stay, they get automatically relief from the automatic stay unless the Court holds a hearing within 30 days...
Three Bankruptcy Filings in 12 Months Equals No Automatic Stay
Three bankruptcy filings in 12 months seems a bit much, yes? But it happens. Perhaps there was carelessness by the filer or an attorney, or perhaps there was misplaced hope that a Chapter 13 case could succeed but then a sudden loss of income occurred...
Does Sending 1099 To Bankruptcy Debtor Violate Automatic Stay
The debtor received his bankruptcy discharge in 2008. The mortgage company sent the debtor an IRS From 1099 representing imputed income for forgiveness of the mortgage debt. The attorney believes that sending the 1099 may be a violation of the automatic stay
If I file bankruptcy on the IRS, but my spouse does not, will the filing stop the IRS to both of us or only me
When a bankruptcy is filed on the IRS, Section 362 of the Bankruptcy Code imposes what is called an “automatic stay” on collection activity by creditors, including the IRS...
Example Of Targeted Direct Mail To Your Referral Sources
I receive email arguing with me about the use of targeted direct mail (TDM) to my referral sources, and also wanting to know exactly what it is I mail out. First as to the argument, TDM in my case goes to my referral sources or my potential referral sources...
Contracting for Stay Waivers
There are doctrinal problems with the enforceability of prepetition waivers of the automatic stay, namely that the stay is a right of the estate's not the prepetition debtor's, so there isn't anything the prepetition debtor can contract for.
Different Forms of Contact During Bankruptcy By Mortgage Lender
We enjoy reading Chuck Newton's Stay Violation website as it contains a wealth of information about what is and what is not considered a stay violation in bankruptcy court. A recent post discusses how a court viewed numerous letters and phone calls by GMAC to a homeowner regarding the homeowner's mortgage...
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