November 10, 2014

MLG Seeks Sanctions in Federal Bankruptcy Court for Violations of Discharge

In two recent cases, MLG attorneys are seeking sanctions alleging creditors violated our clients’ bankruptcy discharge.

In one case, a commercial landlord who received notice of our clients’ bankruptcy filing failed to withdraw a writ of body attachment (comparable to a bench warrant) and our client was incarcerated long after the discharge had been entered. After our client posted a $4000 cash bond to secure his release, the creditor sought to keep the bond money rather than return the bond to our client. MLG Attorney Larry Regan filed to reopen the closed bankruptcy case and then filed a motion for sanctions: “We are seeking compensatory and punitive damages and reimbursement of all attorney’s fees and costs. The ‘Fresh Start’ represented by the discharge is the cornerstone of bankruptcy relief that all debtors ultimately want. Creditors cannot be allowed to feel that they can violate the discharge with impunity.”

In the second case, the holder of a defective second mortgage which had been discharged in a prior Chapter 7 bankruptcy was harassing our client for payment on threat of foreclosure. Although mortgage liens normally pass through bankruptcy, in this case MLG argued that certain defects in the mortgage documents prevented the mortgage from becoming a lien at all. Therefore, upon entry of the discharge, no debt reamianed. MLG Attorney Michael Ostroff commented: “The mortgage company in this case has continued to harass the debtor despite repeated notice of the discharge and explanation of the defective nature of the alleged lien. We are seeking the full range of sanctions to deter future misconduct by this creditor and others.”

If you or someone you know needs a bankruptcy attorney who is ready to fight for your rights, contact Montero Law Group for a free consultation.

Call 301-588-8100 to schedule your free initial consultation.