In re Adams (18-40696)

The issue before the Court was whether a creditor violated the automatic stay by applying non-bankruptcy estate funds, which the Debtor gave voluntarily to the creditor after filing, to a pre-petition dischargeable claim.  The Debtor further argued that, even if the creditors application of those funds to its claim was not a violation of the automatic stay, refusing to remit the funds to the Debtor after his request was a violation.  The Court rejected these arguments.  It held nothing in 11 U.S.C. § 362 prevents a creditor from retaining and applying a voluntary post-petition payment from non-bankruptcy estate funds.  Further, the Court rejected the Debtor’s argument that, in accepting the payment, the creditor was required to give the disclosures enumerated in 11 U.S.C.  § 524(k).In re

Wednesday, September 12, 2018