66 East Main Street, 3rd Floor Little Falls, NJ 07424

$25K Punitive Damages for Stay Violation – Car Repossessed

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Background:

  • Debtors purchased a 2011 Cadillac Escalade
  • Key factor in the purchase was the ability to accommodate a lift and wheelchair.
  • Paid $14,000 in cash; financed $7,243.
  • Agreed verbally to make bi-weekly payments to the auto sales company.
  • Missed two payments before filing for bankruptcy.
  • Filed Chapter 13 relief on December 8; the next payment due to the auto sale company was December 9.
  • The Debtors’ counsel notified the auto sales company of the petition and that the car payment was in the Bankruptcy Plan and would be paid in full.
  • Auto Sales Company repossessed the car on December 10.
  • Debtors’ attorney spoke with the manager of the auto sales company advising of the bankruptcy protection, valuable items were needed from the car, a scooter and wheelchair were in the car.
  • Manager refused to return the car or its contents.
  • In May, the Debtors filed a 4-count complaint against the auto sales company for willful violation the automatic stay and other relief.
  • Auto sales company did not appear in Court or respond to the complaint.

Court Ruling:

  • Defendant (auto sale company) wrongfully repossessed the vehicle.
  • Defendant’s actions constitute egregious conduct and warrants a substantial award of punitive dames.
  • Further uncooperative behavior took place, the Defendant disposed of the car when the Debtors began the adversary proceeding.
  • Failing to appear in Court, the Defendant exacerbated the damages to the Debtors.
  • Court award: Actual damages of $23,100; attorney fees of $4,040; and punitive damages of $25K.

You cannot ignore the Court’s rules or the laws regarding bankruptcy protection.