Process Servers AFTER FILING-FYI

[sisterfunkhaus]

I posted a thread in the chapter 7 section about how a server was calling me to see if he could come on my property (there is a private property sign) to serve me after I had filed BK (ch 7). There was a question as to whether automatic stays apply to process servers acting on behalf of the plantiff. I got an answer. It is yes, it does apply if you have notified them verbally, or in writing of the BK.

When he called me, I told him I had filed chapter 7 and that he could not serve me and gave him my case number and attorney name and info. He called back and said that another server told him he could and should (I am sure he just wanted to collect his $$$). My attorney told me today that without a doubt that once a creditor or anyone working on the creditors behalf has been notified of BK filing, even if it is verbally, that they can be held in contempt of court if they continue to act of behalf of the creditor. She said it applies to ANYONE acting for the creditor, including process servers. It supposedly doesn't matter that a case has been filed in a court of law. Since it is now void b/c the papers were not served previous to filing and the server is acting on behalf of the plantiff, if notified before an attempt to serve, they are in violation of the automatic stay.

Here is an interesting case where a debtor filed suit because he was served after an automatic stay. In this case, the credit card company actually notified the server service. In my case, I notified him, gave him my case number and lawyer's number and he still wanted to serve me. Apparently his ignorance of the BK laws is no defense as it is his responsibility as a private server to know the laws. He has not tried to serve me. If he did not get the message and still tries, someone is in big trouble. He was obviously new. He is going to get himself in a mountain of trouble if he doesn't learn the ropes soon.

http://www.id.uscourts.gov/decisions-bk/Kinseydecision.pdf

In this case, it was proven that the stay was violated, but no damages were awarded. My question is then, what motivation do cc companies have for NOT violating the stay if debtors have to bend over backward to prove damages? Are they even fined for violating the stay?

I'm not asking this for me, I am just curious about what actually happens to companies that violate the stay aside from the debtor suing and probably losing unless they lost their job as a direct result and have documentation of that.

[sisterfunkhaus]

hat the individual seeking damages was actually injured by the violation of the stay.

It even goes on to mention that attorney's fees may not be collectible unless the debtor can prove injury.

This seems SO wrong. it is obviously written in favor of big business. Seriously, it seems like we are being protected, but how are we really being protected? If a creditor decides to call me over and over at home, what injury could I prove? First, I would have to prove the calls happened. Even if I had caller ID, they could be using a dummy name and number. Also, It didn't hurt me in any way. It could cause mental anguish, but there is no way to prove mental anguish. If they called me at work enough, I could get fired, but is a company really going to actually document for you that you were fired due specifically for creditor calls? They would probably word it in a way that would make it difficult to prove that you lost your job b/c of creditor calls. So, no damages. I did read about a case or two where people were give symbolic damages of $250 plus attorney's fees of $1500. Big deal. That is nothing to big companies.

It seems like nothing more than an empty symbolic law that offers no real protection for the creditor. Yes, most creditirs follow it, but for the ones who choose not to, nothing much seems to happen. I read the USTP article that I referenced above, and while it used the word contempt to describe a violation of the stay, it didn't speak of any fines that had to be paid.

As I said before, my concern has nothing to do with me. No one has violated a stay in my case. My concern is that big businesses are obviously being shielded and protected by a law that does very little to actually protect the debtor. There seem to be very few cases where there are repercussions for violation of the automatic stay.

[jp2861]

I think most of the consumer laws on the books suck. Anyone employed in the collections business has to commit some very serious violations before anything gets to the court level. They know this and push the envelope every day. Most of the complaints against them are small time complaints and never get past the complaint process. These less than desirable collectors, lawyers, etc., know that it will cost a plaintiff more to go to court than what they will get even if they win. Not to mention that most debtors aren't in a financial position to retain a lawyer to fight it. The only way any true protection will come about is if the laws are enforced, at every level. I don't see this happening with creditor friendly judges, judges not up to par in consumer law, etc. So, basically, most of the laws are meaningless. I suppose some educated debtors can use them to get the gangsters to back off, but that seems to be the extent of it. Unless it's a big money case the laws seem to be useless.

[lrprn]

In this case, it was proven that the stay was violated, but no damages were awarded. My question is then, what motivation do cc companies have for NOT violating the stay if debtors have to bend over backward to prove damages?

According to http://www.molleurlaw.com/article-14.php - "Subsection 362(h) describes the penalties that can be assessed for violations of the Automatic Stay. It reads as follows:

(h) An individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, may recover punitive damages."

The key here is what constitutes "injury" to the filer. No injury, no damages. No damages, no punitive damages. Punitive damages are where the creditor/collector financial punishment you are hoping for happens. That's how the law works. You as the injured party have to prove real damanges to you occurred (loss of property, etc) or no punitive damages can be awarded by the court.

Most creditors and collectors are well aware of the automatic stay and none want to open themselves up to a court case they will lose, even if it's just to pay the filer's lawyer. You've run into an ignorant process server. He will learn the hard way once your lawyer sends the letter to their firm stating in no uncertain terms that with one more contact they will be pursued in court. Bankruptcy judges do take violation of the stay very seriously.

[sisterfunkhaus]

The sad thing though is that I read in case after case on the internet that people were NOT awarded attorney's fees in these cases even when it was proven the stay was violated because no actual damages were incurred. The judges were saying that suits shouldn't be bought forth if there are no real damages, so attorney's fees are often not awarded based on this--even though the law says they should be awarded. So basically, what is being put out there is that it's okay to break the stay as long as you do it in a way that does not damage the debtor in a way that can be proven. The burden of proof of damages lies with the debtor and it is really hard to prove from what I have been reading. Most cases I read about were awarded zero damages--including fees even though the creditor was found in violation. There were one or two cases with large damages, but those were cases where the creditor was brazen and jerkish about it and continued even after lawyers sent warning letters.

Another thing I found is that seemingly it happens A LOT. Often within the first month of a stay letters will be sent and the companies will try to blame it on computer error. Courts have consistently found that computer error is not a defense. The only requirement for a stay to be violated is the intention to contact a debtor even without intent of breaking the stay. And, it has been found that people within the company are responsible for the computers, so that isn't a valid excuse. Even with that said, it seems rare for damages to actually be awarded.

One thing I did find that is comforting is that more debtors are educating themselves and confronting lenders who contact them. I actually found a site where collectors were quite irritated that debtors knew so much about stays b/c it kept them from being able to violate the stay. Apparently, in days past, people didn't know so much and the stay was violated more often.

[jp2861]

Like I said, most consumer laws are meaningless. They look great on paper and that's about it.

[GoingDown]

Ah but debtors do win judgments against creditors for violating the FDCPA, if they are careful in documenting and proving their case. And that's why MOST debt collectors will at least try to follow the FDCPA.

The most powerful weapon in a debtor's arsenal is the tape recorder. If the original poster had tape recorded the telephone call telling the process server that it was contempt of bankruptcy court to continue to attempt to serve them after filing bankruptcy, and if that person had simply played back that tape recording for the process server to hear, I'll bet they would never hear from that process server again.

I've noticed every time I mention that I am tape recording the telephone call from a debt collector, they become very compliant with the FDCPA or they get off the phone very quickly and I usually never hear from them again. If they do call again, I play back some of the past calls I taped from them, and after they hear the evidence, I never hear from them again. It's very effective.

I live in Arizona, where it is perfectly legal to tape record any phone call.

[twinsplus14me]

Sister... I noticed your sig says your tax refund was exempt. No problems keeping it at all? Our state exemptions say it's exempt too, but I just wondered what the lawyer said about it specifically?

We've had 2 process servers come thru our gate which is clearly marked "private property-no trespassing" and serve us. The gate was open, but I still didn't think they'd be able to do it. We haven't filed yet though.

[sisterfunkhaus]

Sister... I noticed your sig says your tax refund was exempt. No problems keeping it at all? Our state exemptions say it's exempt too, but I just wondered what the lawyer said about it specifically?

She just said that I can keep it. I trust her. She is known as being one of the best in the area and is an ex-trustee. She was named a Super Attorney by Texas Monthly Magazine which means that she is one of the most respected by her peers. Her picture was even on the cover. I guess when she says something, I believe it b/c she only does BK, she is well respected and has been doing this for eons. She was the partner of my parent's BK attorney back in the late 80's.

My case was listed as no asset on my 341 papers. I know that could change at the 341, but I am doubting it. Plus, my measly tax return would do nothing to pay off my 20+ creditors and over $200,000 of debt (half of which is student loans). They would get like $10 a piece or something. Doesn't seem worth the trouble.