Bankruptcy Court Enforces Automatic Stay Award by Debiting Award From Creditor’s Claim, Collects Cases Reporting Damage Awards

Bankruptcy Court Enforces Automatic Stay Award by Debiting Award From Creditor’s Claim, Collects Cases Reporting Damage Awards

Prior to filing bankruptcy the Debtor was paying Defendant Americar, Inc. d/b/a Auto Brokers (“Auto Brokers”) for the purchase of a 2007 GMC Yukon Denali and written notice was sent to Auto Brokers. Auto Brokers filed a proof of claim in the amount of $11,338.40.

Approximately nine months later Auto Brokers contacted the vehicle insurance company and learned the insurance policy had been cancelled. Auto Brokers hired a towing company to repossess the vehicle.

Later, the Debtor was driving the vehicle when a wrecker pulled in front of him, blocked him, and forced him to pull over. The wrecker driver demanded that the Debtor surrender the truck and grabbed the keys from Debtor. The Debtor informed him he was in a bankruptcy.

While inside the truck, the Debtor called Auto Brokers and informed them he had insurance on the vehicle. The employee told Debtor he could have the truck if he provided proof of insurance and paid $200.00. The Debtor refused to get out of the truck. The wrecker driver loaded it on the wrecker while he was inside and told the Debtor he would drive off if he didn’t get out. Now about five feet off the ground, the Debtor jumped out of the truck.

He rode in the wrecker back to Auto Brokers. At Auto Brokers he reminded the employee of the bankruptcy and spoke to the owner on the phone. The owner refused to release the vehicle. He walked two miles to his wife’s employment in cold weather.

The Debtor’s attorney then unsuccessfully demanded return of the vehicle. The Debtor filed an adversary against Auto Brokers for violation of the automatic stay and a motion for immediate turnover and to expedite the hearing. The Court ordered the vehicle returned and Auto Brokers complied.

On the sanctions issue, Auto Brokers argued that the vehicle was regularly driven by the Debtor’s wife and therefore was not property of the estate. Also, they complained that the insurance had lapsed before the repossession.

In his ruling the Court referenced multiple cases and the damage awards given for similar situations.

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