(Bankr. W.D. Ky. Nov. 16, 2016)
The bankruptcy court grants in part and denies in part the debtor’s motion for sanctions for violation of the automatic stay. The government agency sought to collect its loan default claim by set off against the debtor’s tax refund. The debtor filed bankruptcy, and the government effected the set off before its system flagged the account for the bankruptcy. The court finds a technical violation of the automatic stay but also finds that a set off would have been appropriate and there was no evidence that a stay relief motion would have been denied. Accordingly, the court awards the debtor a minimal amount for the inadvertent stay violation. Opinion below.
Attorney for Debtor: Julie Ann O’Bryan
Attorney for Creditor: Assistant U.S. Attorney, Jessica R. C. Malloy
Author: Matt Lindblom
(Bankr. E.D. Ky. Jan. 7, 2015)
The bankruptcy court had found the debtor liable to her landlord for damage done to the leased property and held that liability nondischargeable under 11 U.S.C § 523(a)(6), because the debtor willfully and maliciously caused the damage. The court had also avoided a preferential transfer to the landlord, granting the debtor’s requested relief in her counterclaim. Here, the court holds that the landlord is entitled to recover its attorney fees as part of the nondischargeable debt. The Kentucky statute permits recovery of reasonable attorney fees when a tenant willfully breaches a lease. The court also holds that the landlord is entitled to set-off the preference liability against the nondischargeability judgment. Because the nondischargeability judgment and the preference judgment were both post-petition mutual obligations, set-off is permitted. Opinion below.
2015-01-07 – sager v bennett