The County Animal Control Office did not violate the automatic stay when it refused to return 36 cats it had confiscated from the debtor’s property where it acted within its police and regulatory powers, and the court lacked jurisdiction to order the return of the cats where the trustee had abandoned them. In re Mitchell-Smith, No. 21-57646 (Bankr. N.D. Ga. June 17, 2022). Read More
Tag Archive: automatic stay
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Cat Confiscation Case
Posted by NCBRC - June 24th, 2022
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Stay Still Attaches to Undisclosed Property 30 Years after Bankruptcy
Posted by NCBRC - May 26th, 2022
Plaintiff’s attorneys were liable for monetary contempt sanctions for violating the automatic stay due to their failure to investigate the plaintiff’s bankruptcy petition which was filed decades earlier to determine whether he had disclosed his interest in mineral rights in land that was the subject of a current state lawsuit. In re McConathy, No. 90-13449 (Bankr. W.D. La. May 20, 2022).
In 1990, the debtor and his wife filed a chapter 7 bankruptcy petition for which they received a discharge. On two occasions they reopened their bankruptcy to disclose previously undisclosed assets and in both cases the assets were addressed and the case closed. However, unbeknownst to the bankruptcy court and chapter 7 trustee, at the time he filed his petition, the debtor owned mineral rights on land in Kansas. Read More
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Efforts to Collect Domestic Support Violates Automatic Stay
Posted by NCBRC - March 28th, 2022
An ex-husband’s efforts to collect medical expenses and a $50.00 direct payment ordered by the Family Court violated the automatic stay, where, unlike the debtor’s other domestic support obligations which he collected through wage garnishment, payment for the debts was not limited to non-estate property as required by the domestic support exception to the automatic stay. In re Dougherty-Kelsay, No. 19-8013 (B.A.P. 6th Cir. March 21, 2022).
The Sixth Circuit affirmed. Dougherty-Kelsay v. Kelsay (In re Dougherty-Kelsay), No. 22-5270 (6th Cir. Oct. 17, 2022) (unpublished).
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No Stay in Effect where Co-Debtor Had Two Previous Cases within Year of Filing
Posted by NCBRC - January 13th, 2022
No stay arose in the bankruptcy case as to either the debtor husband or the debtor wife, where the husband had filed and dismissed two cases in the preceding year, in which the wife had not joined, and then the husband and wife filed the present joint case. In re Koval, No. 1:21-bk-11170 (Bankr. C.D. Cal. Nov. 10, 2021).
The debtor and her husband filed for chapter 13 bankruptcy on May 26, 2021 in the Southern District of California. At that time, the debtor-husband had two bankruptcies he had filed and dismissed within the previous year. The second of the two bankruptcies was dismissed on May 25, 2021, with a 180-day bar to refiling. The debtor-wife had no previous bankruptcies. The co-debtors moved the court for an order stating that the stay was in effect in their case. The court found that, due to his prior bankruptcy filings, the stay was not in place with respect to the debtor-husband. It made no finding with respect to the debtor-wife. The case was then transferred to the Central District of California and debtor-husband was dismissed as a debtor due to the 180-day filing bar. Read More
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Debtor Entitled to Attorney Fees from Defense of Motion for Relief from Stay
Posted by NCBRC - December 20th, 2021
The chapter 13 debtor was entitled, under Oregon’s reciprocal fee statute, to recover attorney fees for successfully defending a motion for relief from stay where the motion required interpretation of the terms of the motor vehicle lease. In re Gilgan, 2021 WL 4047463 (Bankr. D. Or. Sept. 3, 2021) (case no. 19-32009). Read More
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Ninth Circuit BAP Addresses Impact of Fulton
Posted by NCBRC - November 18th, 2021
The Supreme Court’s decision in City of Chicago v. Fulton, 141 S. Ct. 585 (2021), effectively overruled Ninth Circuit precedent to the effect that a creditor has an affirmative obligation to return pre-petition funds to a debtor even if those funds are held by a third party. Therefore, when the creditor here stayed its garnishment action and acquiesced to release of funds by the debtor’s bank, it maintained the status quo and fulfilled its automatic stay obligations. Stuart v. City of Scottsdale, No. 21-1063 (B.A.P. 9th Cir. Nov. 10, 2021). Read More
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Third Circuit Reexamines Defense to Stay Violation
Posted by NCBRC - September 20th, 2021
The Third Circuit’s 1992 precedent establishing that a creditor’s reliance on persuasive legal authority may be a defense to the “willfulness” element of a stay violation is still good law but does not apply to a creditor who argued unsettled law but did not rely on any compelling legal authority to justify its conduct. California Coast Univ. v. Aleckna, No. 20-1309 (3rd Cir. Sept. 9, 2021).
When the debtor completed the course work necessary for graduation from California Coast University, she still owed $6,300 in tuition. She filed for bankruptcy and then requested her certified transcript from CCU. CCU, aware of her bankruptcy filing, ceased its collection efforts and eventually gave her an uncertified copy of her transcript with no graduation date listed on it. CCU maintained that the incomplete transcript was part of its policy that students who owe tuition at the completion of their studies have not technically graduated. CCU conceded that the tuition debt was dischargeable. Read More
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Retroactive vs Prospective Relief from Stay
Posted by NCBRC - August 31st, 2021
The bankruptcy court erred when it denied prospective relief from stay based on the same analysis it used when it denied the mortgage creditor’s retroactive annulment of stay motion. Wilmington Savings Fund Soc’y v. Fairbanks, No. 21-1019 (B.A.P. 9th Cir. Aug. 12, 2021) (unpublished).
When the debtor defaulted on her mortgage payments, she hired Home Matters USA to communicate with the foreclosure trustee. Home Matters assured her that, due to Covid foreclosure restrictions, her home would not be sold at auction. Home Matters failed to adequately protect her and her mortgage creditor, Wilmington Savings Fund Society, held a nonjudicial foreclosure auction where it sold the property for $7,000 in excess of the total debt. The sale was the first indication to the debtor that her property was not protected from foreclosure. In an effort to save her home, she immediately filed a chapter 13 petition. Three days later, the foreclosure trustee executed the deed and the purchaser recorded it within the statutory fifteen-day period. A month later, Wilmington moved for retroactive annulment of the stay to validate the transfer, or, in the alternative, for prospective relief from the stay to allow the foreclosure trustee to make the transfer again. The bankruptcy court denied both the retroactive and prospective stay motions. Wilmington appealed to the Bankruptcy Appellate Panel for the Ninth Circuit. Read More
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Attorney Fees Intended To Pressure Debtor Unnecessary
Posted by NCBRC - May 27th, 2021
The creditor’s attorney fees attributable to its repeated motions to continue foreclosure proceedings during the debtor’s pending bankruptcy cases were unnecessary given that the automatic stay was in place, and the bankruptcy court deducted those fees from the allowed claim. In re Peta, 2021 WL 608233 (Bankr. E.D. Pa., Feb. 10, 2021) (case no. 2:19-bk-13264). Read More
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Smattering of Automatic Stay Violations by HOA
Posted by NCBRC - April 2nd, 2021
Citing six separate stay violations by the homeowner’s association, the district court awarded the debtor damages for emotional distress and property interference. It also upheld the bankruptcy court’s award of punitive damages and attorney’s fees. The court remanded, however, for a determination of whether the damages for property interference should have extended beyond the end of the automatic stay. In re Parker, No. 19-2588 (N.D. Cal. March 22, 2021). Read More
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