Debtor’s rights & Bankruptcy Protection are important. Not all lawyers adhere to the code in Bankruptcy Law and debtor’s rights. Here is an example of where a sloppy and arrogant bankruptcy law firm overstepped its boundaries. Even though a Debtor filed bankruptcy, this bankruptcy law firm continued to sue the Debtor in State Court. As a result, the law firm must pay $50,000 in punitive damages due to ignoring a bankruptcy Debtor’s rights and protections.
Details of Case:
- Debtor filed for bankruptcy.
- The debtor was a basketball coach and was sued by a former player for sexual contact.
- The law firm that represented the player dismissed their lawsuit against the coach.
- The law firm was notified of the Bankruptcy.
- One year later, the Law Firm filed a Complaint in State Court for damages from the Debtor.
- Debtor filed an Answer to the Complaint and copied the Law Firm.
- The debtor was filing for his bankruptcy protection.
- The law firm claimed they did not receive the answer since it was sent to the wrong address.
- Debtor mailed the notice to the lead associate working on the case.
- Although the Debtor was “not an admirable person”, he was entitled to Debtor’s rights in bankruptcy.
- The law Firm was very familiar with the bankruptcy code and debtor’s rights.
- The law Firm used this re-filing as a tactical maneuver to try to collect from a debtor who received a discharge in bankruptcy.
- The court found the law firms’ actions to be egregious.
- Court ordered the law firm to pay the Debtor $50,000.00.
- $50,000.00 in punitive damages as well as actual damages of $23,132.00.
- Law Firms cannot plead ignorance when they try to get around the bankruptcy code.
- Debtors have rights and protection when filing bankruptcy.
This law firm was sloppy and arrogant. Rather than re-filing a Complaint, they should file a Complaint in Bankruptcy Court to determine the dischargeability of this debt.