What's Your Sleepless Night Worth?
The moment a bankruptcy case is filed, an automatic stay is imposed that requires all creditors to stop their collection activities. Since most creditors in a bankruptcy case are large institutions who process countless bankruptcy filings every day (Bank of America, Citi, Ford Motor Credit), there usually isn’t much of a problem in getting the creditors to comply with the law. They know the routine.
But the little guys don’t. The bankruptcy court sends a bankruptcy notice to the chap who put up your drywall and he’s likely to throw the letter in the trash. Not maliciously, always, but simply because that’s what he does when he gets letters that don’t seem very important. Then he sends you another bill. That’s when we step in and send him a somewhat sterner letter, informing him that all collection activities must stop. Usually it works. Sometimes it doesn’t.
That’s what happened in a recent case in our district called In re Coopersmith. In that case, a construction company was owed $4,951.16 by the debtor. The debtor filed bankruptcy, but the contractor kept right on trying to collect on that $4,951.16, even after the debtor’s attorney sent him letters. To make matters worse, the creditor started to write little hand-written notes and attach them to the invoice – each note getting just a tad nastier than the one before.
So, the debtor sued.
In the complaint, the debtor said that the invoices and hand-written notes caused him “anxiety and sleepless nights.” But it’s not often enough to simply catch someone doing something naughty and demand money from them from a judge. A plaintiff must show damages: a hospital bill, a broken window, something. What did the debtor, here, have to show for the bad acts of the creditor? Nothing, just “anxiety and sleepless nights.”
For the judge in this case, that was good enough. “Debtors harmed by a willful violation of the automatic stay [can] recover damages for emotional distress without expert testimony or out-of-pocket loss,” went the ruling.
So what was the debtor’s sleepless night worth? In this case, $2,500. Last time I checked at the Best Western, that would buy twenty-five nights.
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For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.
