BAP’s Consider Appeals of Sanctions Orders

Posted by NCBRC - March 15, 2012

Creditor’s counsel is appealing an order by the Bankruptcy Court of the Western District of Missouri awarding chapter 7 debtor sanctions in the amount of $1,500.00 as a result of creditor’s violation of the discharge injunction under section 524(a)(2) and (3). In re King, No. 12-6014 (B.A.P. 8th Cir.). The appeal, filed on February 21, 2012, is before the 8th Circuit BAP. The debtor had filed a motion to reopen his bankruptcy case to add the creditor and the underlying debt was thereafter discharged with no objection. The creditor then filed suit in State Court seeking recovery on that debt. After notifying creditor’s counsel of the bankruptcy discharge to no avail, debtor sought sanctions and attorney fees against creditor’s counsel. The creditor’s counsel appeals the bankruptcy court’s denial of creditor’s motion for reconsideration of the court’s order granting sanctions.

The BAP for the 9th Circuit is also considering an appeal of an order granting sanctions against creditors and their counsel in the amount of $11,217 for violation of the automatic stay under section 362(a). In re Knapp, No. 12-1092 (B.A.P. 9th Cir.). Like King, that case involves pursuit of a state court lawsuit against chapter 7 bankruptcy debtor even after debtor’s counsel sought to educate creditor’s counsel about the automatic stay.

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