Finally the Court is Putting Some Teeth into Automatic Stay Violations
Lately the Middle District of Florida Bankruptcy Court for Fort Myers Division has been putting some teeth into Automatic Stay violation. The Automatic Stay, among other things, protects debtors in bankruptcy from continued collection actions. If creditors willfully violate the Automatic Stay, the court is authorized to compensate debtors for any actual damages and sanction the creditor to prevent future violations.
Despite the protections afforded by the Automatic Stay, creditors routinely violate it. Sometimes, the matter is cleared up with a cease and desist letter while other violations are only halted by seeking relief from the court.
In the past, sanctions against the creditors in the Middle District of Florida have been quite insignificant to cause any preventative measures by creditors who consistently violate the Automatic Stay. However, it seems times are changing and the court has had enough of the violative conduct. While in court today, for one of my own cases and observing another attorney’s seeking sanctions, the judge awarded compensatory damages to both of our clients and $10,000 in punitive damages for each along with our attorney’s fees.
These awards are not limited to the Fort Myers Division as recently several cases have come down from other divisions in the Middle District of Florida awarding similar damages. For example, Judge Glenn in In re Wallace, 09-bk-594 awarded $5,000 in actual damages and $15,000 in punitive damages. If this trend continues, hopefully creditors will take steps to correct their internal problems and egregious violations of the Automatic Stay will be a thing of the past. Until that we will continue to seek relief from the court to protect our clients.
This Blog was written by Attorney David Fineman, Esq. of The Dellutri Law Group, P.A. Mr. Fineman practices Bankruptcy Law, Fair Credit Reporting Act Law, Fair Debt Collection Practices Act Law and in other areas of Consumer Law.