Case Summary:
Creditor provided printing services to the Debtor and her business prior to her petition date. Debtor owed approximately $5,800 for such services. Debtor filed a voluntary Chapter 7 petition on September 19, 2019, and listed the creditor on her Schedules. Creditor filed a pro se small claims complaint two business days later, and the Debtor was served by a process server thirteen days later. On October 8, 2019, Debtor’s attorney notified the creditor of the bankruptcy filing and offered to settle the stay violation for $1,000, along with the dismissal of the small claims action. Creditor dismissed its complaint two days later but did not pay the $1,000. Debtor filed a Motion for Order for Contempt and Sanctions for Violation of the Automatic Stay more than a month later. The Court denied the Motion because the creditor did not willfully violate the stay and took prompt action to remedy its technical violation. The Court found no damages beyond minimal attorney’s fees incurred to notify the creditor about the bankruptcy. Debtor never had to appear in court to litigate the complaint. The Court found that the Debtor failed to mitigate her damages and that her attorney was not entitled to any attorney’s fees incurred after the creditor had dismissed its small claims complaint.

Statute/Rule References:
11 U.S.C. § 362 -- Automatic Stay
11 U.S.C. § 362(k)(1) -- Automatic Stay Damages

Key Terms:
Automatic Stay
Duty to Mitigate Damages
Technical Violation of the Automatic Stay
Willful Violation of the Automatic Stay