Failure To Remove Lien On Checking Account Is Violation Of the Automatic Stay
February 22, 2007
In the case of In re Wright, Case No. 04-18487-CEC (Bankr. E.D.N.Y. 2005) the law firm of Sharinn and Lipshie P.C. was held liable for violating the automatic stay by failing to remove a lien the firm had placed on the debtor’s checking account, even after it had received notification of the filing of her bankruptcy petition. In the decision, Judge Carla E. Craig noted that
A failure to act by a creditor, such as a failure to release a restraint on the debtor’s bank account, where the creditor had knowledge of the bankruptcy filing, may likewise be a violation of the automatic stay.
In addition, the court referred to In re Robinson, 228 B.R. 75, 80 (Bankr. E.D.N.Y. 1998) for the holding that the receipt of the notice of bankruptcy from the clerk of the court is sufficient for a creditor to be deemed to have knowledge of the bankruptcy proceeding. In other words, this decision seems to maintain that the debtor’s lawyer need take no action aside from listing the creditor on the schedules (thereby ensuring that the creditor is served with a notice of the bankruptcy filing) in order to pursue a stay violation to recover damages as well as legal fees.
On the same date, Judge Craig also decided In re Henry, 04-18738-CEC (Bankr. E.D.N.Y. 2005) as well as In re Parry, 04-15725 (Bankr. E.D.N.Y. 2005) on nearly the same facts.
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