Summary:
The Lyles brought a motion for sanctions against Corey Heating, Air Conditioning, & Plumbing Inc. (Corey Inc.) for violating the automatic stay under 11 U.S.C. § 362, alleging that despite the filing of Chapter 13 bankruptcy case, Corey Inc. continued to send monthly payment invoices to the Lyles for a prepetition debt. The court found that Corey Inc.'s actions constituted a willful violation of the automatic stay, awarding the Debtors' bankruptcy estate $325 in nominal damages and $1,250 in attorney fees. However, the court rejected Mrs. Lyle's personal claims for her own medical damages, finding that only Mr. Lyles was "the target of the attempted debt collection" and that even if that was not the case, Mrs. Lyle's layman testimony did not convincingly tie specific medical costs to the debt collection letters.
Commentary:
This is the kind of stay violation that bedevils not only debtors but debtors' attorneys, specifically the low level disregard and continued collection activity particularly by small creditors. Mere monthly statements, which would be of little consequence for many people, can take on heightened importance for debtors that have been through the sweat box of debt collection that led to their bankruptcy filing. Collection demand after the filing of bankruptcy can leave these battered and bruised debtors to distrust their own attorneys and the whole system when the automatic stay does not protect them fully. This can be further exacerbated when judges struggle to recognize that debtors are often eggshell skull victims and not as resilient as others in the face of this kind of debt collection.
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