Bankruptcy’s strong protection of people in bankruptcy results in a large judgment against a creditor requiring payment of $27,483 to the person in bankruptcy.
A nurse took out a “payday loan for $575 from CIC (check into cash of Washington, Inc.). The way these loans work requires the borrower to post-date a check back to the lender to secure the loan. Before the loan was due, the nurse decided to file for bankruptcy and notified CIC of same and advised them not to cash the check. She then filed for bankruptcy.
CIC failed honor the bankruptcy’s automatic stay of execution and cashed the check after making a series of harassing phone calls to the nurse at work in violation of the automatic stay of execution.
The bankruptcy lawyer sued the payday loan company for damages, emotional distress, punitive damages, costs and attorneys fees. At trial the bankruptcy court found a willful violation of the automatic stay and awarded $27,483 to the nurse!