Bankruptcy Court Awards Debtor $204,867.00 in Damages Against Creditor and Creditor’s Law Firm for Post-Discharge Lawsuit of Discharged Debt

Bankruptcy Court Awards Debtor $204,867.00 in Damages Against Creditor and Creditor’s Law Firm for Post-Discharge Lawsuit of Discharged Debt

On April 23, 2019 the Bankruptcy Court for the Northern District of Oklahoma entered a lengthy 87 page opinion awarding the Debtor $50,000.00 in damages for emotional distress, $54,867.00 for her attorney’s fees, and $100,000.00 as punitive damages against the creditor and creditor’s counsel. NACBA member Ron Brown spearheaded the case along with NACBA member Greggory Colpitts.

In reaching this decision, the bankruptcy court ruled on several issues important to all debtors including

  • Whether a post-discharge judgment in state court is void ab initio;
  • Whether a bankruptcy discharge must be asserted and proved by the Debtor in a post-discharge proceeding;
  • Whether the Rooker-Feldman doctrine applies in this case;
  • Whether the bankruptcy court had jurisdiction to determine if their state court post-petition claim included discharged debt;
  • Whether the Debtor lost the protection of her discharge by pleading it in the state court action;
  • Whether the doctrine of issue preclusion prevented the bankruptcy court from ruling whether the state court judgment was discharged; and
  • Whether the Creditor can be held jointly liable with her counsel for sanctions.

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