Stay Violation Costs Creditor $3,000

This is a case where I represented the Debtor in which I litigated in bankruptcy court earlier this year in the Middle District of Pennsylvania.  

The Court held that a creditor in possession of property of the bankruptcy estate must immediately and unconditionally turn over the property to the estate once the petition is filed. Having failed to do so, the defendant was liable for the damages caused by his violation of the automatic stay. 

The bankruptcy court previously ruled that the defendant willfully violated the automatic stay by refusing to return the debtor's car to her after she filed for bankruptcy.  The defendant loaned the dbetor the money she needed to recover her car after she defaulted on the payments.  The parties agreed that the debtor would repay hte loan, and that the defendant would have an interest in the car.  When the debtor moved out of the area, she left the car with the defendant.  She then told the defendant that she wanted the car back, but the defendant refused to give it to her.  The debtor filed for bankruptcy relief, and demanded that the defendant refused to return the car.  More than one year later, the defendant returned the car after the bankruptcy court ruled that his continued retention of it violated the automatic stay.  In this ruling, the court awarded the debtor actual damages of $2,500 for attorney's fees and $500 for punitive damages.   

Dean v. Carr Opinion (J. France) - Stay Violation Costs Creditor $3,000 by Brent Diefenderfer