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Court – Gets Tough on Willful Violations of Automatic Stay – Car Impounded Twice

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  • Debtor Filed a Chapter 13 petition and listed parking fines in the bankruptcy petition.
  • Parking Authority impounded the Debtor’s car for unpaid parking fines.
  • Parking Authority impounded the debtor’s car a second time.

Court Ruling:

  • The stay violation is a Court Order where compensatory relief as a remedy for contempt of the automatic stay would be granted.
  • Emotional distress was suffered by the Debtor who was out of town caring for his sick mother and cut the trip short. When the Debtor learned of the impounding of the car, the Debtor lost sleep and was distressed.
  • The vehicle seizure also caused marital discord.
  • The second violation of the automatic stay justified $5,000 in damages for emotional distress and sanctions included debtor’s attorneys’ fees and costs.
  • Previously the Parking Authority was before the Court disputing their notice of the 1st bankruptcy; but could not by any stretch of the imagination dispute knowledge of the bankruptcy after that date.   Attorneys for the Parking Authority the second time were in Court disputing the knowledge of the first bankruptcy and wanted the Court to believe they did not know of the bankruptcy????

When an entity is served with a bankruptcy notice, they cannot just ignore it.

Court found a fair way to punish the violator and compensate the Debtor.