Commonwealth Financial Services obtained a pre-petition judgment against the Debtor. The Debtor failed to answer and a default judgment was entered. After obtaining a judgment CFS failed to answer interrogatories in aid of execution which resulted in CFS applying for and obtaining a bench warrant. Such acts occurred 4 years prior to the bankruptcy. Post-Bankruptcy, the Debtor was arrested on the bench warrant. At issue was whether the bench warrant constituted a violation of the stay and a violation of the discharge injunction. The Court found in the affirmative and sanctioned CFS $2,500 for violation of the discharge injunction, $1,740.00 in loss income, emotional distress of $10,000.00 and $30,000.00 for punitive damages.
Despite such award, the Court stated ...
I am less than confident that my decision today will change CFS'
course of conduct. I sincerely hope that its management will chart a new course
and implement procedures which comply with the requirements of the Bankruptcy
Code. It is also my earnest hope that this decision will deter other creditors
from engaging in any similar course of conduct.
I should note that there is no discussion on whether CFS was represented by counsel in the State Court Litigation and if such counsel withdrew. It seems like a small leap to hold the attorney liable if the attorney had notice of the bankruptcy and did nothing. Accordingly, you should be aware of bankruptcy filings and any unique civil remedies that you may have.
Iskric v. Commonwealth (2013 WL 4011126 (BANKR M.D. Pa) 8-7-13
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