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An article title |
Main theses |
Definition |
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Violations
of the Bankruptcy Discharge Injunction WRITTEN BY:
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But more often than not, violations of the automatic stay or the discharge injunction occur out of a misunderstanding of the applicable law. |
An injunction is a legal and equitable remedy in the form of a special court order that compels a party to do or refrain from specific acts.[1] A tax refund or tax rebate is a payment to the taxpayer when the taxpayer pays more tax than they owe. |
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When
a creditor violates the discharge injunction in a bankruptcy case, a
bankruptcy court may hold the creditor in contempt to compensate the debtor
for the violation and to coerce the creditor into compliance with the
injunction. Placid Refining Co. v.
Terrebonne Fuel & Lube, Inc. (In re Terrebonne Fuel & Lube, Inc.), |
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To
determine whether a party should be held in contempt for violating a
discharge injunction, courts employ an objective standard, and contempt is
appropriate when “there is not a ‘fair ground of doubt’ as to whether the
creditor’s conduct might be lawful under the discharge order.” Taggart v. Lorenzen, 139 S. Ct. 1795, 1804 (2019). |
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Under Taggart, three elements must be proven for a court to
hold a party in contempt: “(1) the party violated a definite and specific
order of the court requiring him to … refrain from performing … particular …
acts; (2) the party did so with knowledge of the court’s order; and (3) there
is no fair ground of doubt as to whether the order barred the party’s
conduct.” In re City of Detroit, Mich., 614 B.R. 255, 265 (Bankr. E.D. Mich. 2020). |
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Therefore,
the Court found that, while she never had an objectively reasonable basis for
concluding she was not violating the Discharge Injunction, she had shown that
she was “not proceeding in bad faith but, instead, under a misguided
understanding of how she was restrained under the Discharge Injunction.”
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the
Court ultimately limited its damage assessment to a sanction of $250/day for
every day after the date that this order became final that Leslie McKinney
failed to file a notice in State Court withdrawing the Motions to Enter. |
