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Tag Archives: Automatic Stay

Bankruptcy – Automatic Stay – Willful Violation – Real Property – Mortgage Foreclosure – Misspelled Name – Punitive Damages

In re Gallo Despite having notice of the debtor’s bankruptcy, and despite notes in their own files about the misspelling of the debtor’s name, since the creditors’ software program failed to list the debtor’s name in a bankruptcy search result, the creditors continued their collection efforts against the debtor, going so far as to schedule a foreclosure.

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Bankruptcy – Negotiable Instruments – Promissory Note – Indorsed in Blank – Real Property – Mortgages – Automatic Stay

In re Robinson Where the debtor’s promissory note has been indorsed in blank, and where Residential Credit Solutions (RCS) entered the original promissory note with the blank indorsement into the evidence, RCS is the holder of the note because it is in possession of the original note indorsed in blank. Since RCS has agreed to accept the debtor’s proposed payment plan, RCS’s motion for relief from the automatic stay is denied.

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Bankruptcy – Rents – Cash Collateral – Attorney’s Retainer – Automatic Stay

In re Smithville Crossing, LLC Where the debtor’s agreement with its lender allowed the lender to collect rents from the debtor’s tenants if the debtor defaulted on its loan payments, the debtor was entitled to continue collecting rents between its default and the lender’s notice to the debtor and its tenants that rents were thereafter to be paid to the lender. The rents collected post-default and pre-notice could be used by the debtor as it saw fit, including as payment of a retainer to its attorney. The creditor’s motion to disgorge the retainer is denied. The creditor’s motions to dismiss and for relief from the automatic stay are also denied. The debtor’s motion for turnover of post-petition rents held by the creditor is denied as well.

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Bankruptcy – Automatic Stay – Violation – Sanctions – Post-Discharge Collection – Student Loans – Excepted from Discharge

In re Green Even though the creditor-university has now changed its procedures so that it will not attempt to collect a student’s debts when the university is subject to an automatic bankruptcy stay, the university should not have waited until 2010 to do so. The debtor’s motion for sanctions for violation of the automatic stay is granted in the amount of $2,000. However, the university is not in contempt of court for its post-discharge attempts to collect certain student loan and overpayment amounts.

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Bankruptcy – Automatic Stay – Motion for Relief – Value of Collateral – Equity — Officers’ Salaries

In re M.C. Pipe, Inc. The creditor has a security interest in the debtor-in-possession’s real property, equipment, inventory and accounts receivable. When these assets are assigned their fair market value, the assets’ value exceeds the creditor’s secured claim; therefore, the debtor has equity in the collateral, and the creditor is not entitled to relief from the automatic stay. The creditor’s motion for relief is denied. The debtor’s motion to employ and compensate officers is granted in part.

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Lender sanctioned for repeated violations of automatic stay

A lender that repeatedly entered a couple's property despite the fact that an automatic stay had been imposed during bankruptcy proceedings has been sanctioned for the violation. The sanction came in In re Sands, a matter in the U.S. Bankruptcy Court for the Middle District of North Carolina. HSBC bank was ordered to pay the Sands' $1,200 in attorney's fees incurred when Winston-Salem attorney Kristen S. Nardone brought the motion for sanctions and appeared at two hearings on the motion.

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