New 11th Circuit Case Addresses Bankruptcy Stay Violations

A recent 11th Circuit decision  out of Georgia addressed the burden of proof the plaintiff must carry to recover emotional distress damages for an automatic stay violation.  Though the violation in this case was willful, the court awarded no damages as the plaintiffs offered only conclusory and vague testimony of their stress and anxiety.  In sum, the court held that you can recover emotional distress for a bankruptcy stay violation, but that to do so you must first show (1) that you suffer significant emotional distress; (2) clearly establish the significant emotional distress; and (3) demonstrate a causal connection between that significant emotional distress and the violation of the automatic stay.  The Court explicitly did not determine whether you must suffer a financial or physical injury to be able to recover for emotional distress under 362(k), because the plaintiffs couldn’t prove that they were suffering emotional distress in the first place.

 

For more information about this decision, or the overlap between the bankruptcy code and the FDCPA, please contact Neal Moore or Stephen Kahn directly.