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Bankruptcy Court Finds Creditors To Be In Contempt For Violating Discharge

Posted By admin || 21-May-2010

Creditor Found in ContemptIn the bankruptcy case of Jarvar, Stanley E. and Barbara J.; In re (Jarvar v. Title Cash of Montana Inc., et al.), the bankruptcy court found Title Cash (the creditors) to be in civil contempt for violating the bankruptcy discharge.

The details of the bankruptcy case:

The debtor filed for Chapter 13 relief on Nov. 23, 2001. On March 29, 2002, Title Cash filed proofs of claim for two secured claims, both in the amount of $7,290. On May 23, 2002, Title Cash withdrew both secured claims and then filed a single POC for a secured claim in the amount of $14,605 on June 5, 2002. The debtor's case was subsequently converted to Chapter 7 and dismissed. According to the trustee's final report, Title Cash was $6,046 in principal and $1,041 in interest. On Sept. 7, 2004, the debtor filed for Chapter 7 relief. She scheduled Title Cash as a secured creditor. The debtor received a discharge on Jan. 1, 2005. On Sept. 3, 2008, the debtor filed a state court action against Title Cash. The creditor responded with a counterclaim requesting in personam relief against the debtor, who then filed an adversary proceeding alleging violations of Section 362 and 524. The bankruptcy court granted summary judgment to the debtor on the count seeking relief for a violation of the discharge injunction. Title Cash failed to file a statement of genuine issues, meaning that the facts presented by the debtor in her Statement of Uncontroverted Facts were deemed admitted.

The creditor was in violation of the bankruptcy discharge because Title Cash attempted to make the debtor personally liable (personam) for the debt after it had been discharged. Many creditors have violated debtors' bankruptcy discharge. Such violations can cost the debtor time, energy and money while fighting these violations.  But there have been cases where debtors have received compensation for the damage caused by creditors when they violate the bankruptcy discharge. If a creditor is demanding payment after your debt has been discharged in bankruptcy, contact your bankruptcy attorney immediately.

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