Creditors from time to time violate the automatic stay in bankruptcy, contacting a debtor after the case has been filed. In the case of In re Deailey, 2007 WL 4531804 (Bankr.C.D.Ill. 2007) the U.S. Bankruptcy Court was presented with a motion for default against Chase Bank USA, NA for a violation of the automatic stay. The debtor properly listed Chase, so the creditor received notice of the bankruptcy filing. In spite of that fact, Chase sued the debtor nearly two months after the filing of the bankruptcy case.

The debtor filed a lawsuit against Chase seeking damages and legal fees, and Chase failed to answer or appear. The debtor’s attorney presented a request for compensation for $810. In reducing the award to $400, the court noted that the debtor’s lawyer had not attempted to contact Chase prior to filing the case. In so doing, the court noted that the preference is for

debtors and their attorneys to contact the offending creditor by mail or phone before commencing an action for damages. In re Risner, 317 B.R. 830 (Bankr.D.Idaho 2004). Attorney fees awards may be reduced or denied entirely where the debtor fails to make any reasonable effort to request that the creditor withdraw its offending pleading or cease its offending communication before escalating the matter into a “federal case” by immediately initiating an action for damages. Id. There may, of course, be exceptional circumstances where a creditor by the nature of its conduct or the substance of its communication engenders a reasonable belief that a cease and desist request would be futile.

In the case at bar, the DEBTOR did not call or write CHASE before commencing this adversary proceeding. When CHASE received the Complaint and Summons, it took no further action to prosecute its claim and promptly dismissed the state court complaint. This mitigating response indicates that CHASE likely would have dismissed its complaint based upon a communication from the DEBTOR or the DEBTOR’S attorney directly referencing the pending bankruptcy case and CHASE’S violation of the automatic stay.

This is not to say that the stay violation should be entirely excused. CHASE is a large, sophisticated creditor with a wealth of bankruptcy experience. It can be assumed that CHASE has systems in place to make sure that the automatic stay is honored whenever a borrower files for bankruptcy relief. For reasons not a part of the record, those systems failed here and a willful violation of the stay occurred.