Posted on Dec 26, 2013

In a recent case, a lady filed for divorce, and agreed to surrender her interest in a mobile home to her husband, along with his agreement to pay the lien on it to Green Tree. In 2003, she filed chapter 7 bankruptcy and in her Statement of Intention, said that she intended "To Surrender (the mobile home) to Ex-Husband."

In 2011, she filed chapter 13 and Green Tree filed a proof of claim in her case. In a modified plan, she provided that she surrendered her interest in the mobile home to Green Tree.

Nevertheless, Green Tree proceeded to call her, attempting to collect the debt. She notified her bankruptcy attorney, who brought suit against Green Tree in bankruptcy court for violations of the chapter 7 discharge injunction, and for Green Tree's violation of the automatic stay in the chapter 13 case under 11 USC Sec. 362(a).

The Bankruptcy Court found that Green Tree's filing of a proof of claim in the chapter 13 case was not a stay violation, as the debtor had not properly surrendered her interest in the mobile home to Green Tree. Instead she surrendered it to her ex-husband, so arguably she still had an "in-rem" interest in it.

However, she did properly surrender it in the chapter 13 case, so the Court found that Green Tree had violated the chapter 7 discharge injunction, and also the chapter 13 automatic stay, by calling the debtor and trying to collect.

The court awarded the debtor $1000 in actual damages, and ordered Green Tree to pay her attorney fees of $20,212.70. The court also found that Green Tree "willfully and intentionally violated orders of this court" and assessed punitive damages against them of $25,000 "which the court considers sufficient to deter similar conduct in the future."


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J Thomas Black
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Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization