Strict Liability for Stay Violations?
It appears that violating the automatic stay just got tougher on creditors. Recent Court decisions now appear to suggest that creditors can no longer rely on a good faith defense to any technical violations of the automatic stay. Indeed, a recent court decision held a creditor liable and assessed punitive damages where there were no underlying damages and it took a court hearing just to determine whether the debtor was even liable for the debt associated with the repossessed collateral. In that case, the collateral wasn’t even estate property and the creditor truly believed that the debtor did not owe it any money! To read more about this decision, please click my National Blog Here.
Written by Michael G. Doan