This is very good news for bankruptcy debtors who have been abused and wronged by creditors. Over in the 9th Federal Circuit, the Appeals panel has issued a ruling that is good news for Americans who are abused by creditors [Sternberg v. Johnston, 595 F.3d 937 (9th Cir. 2010)]. Here in Alabama, we are in the 11th Federal Circuit (which has not yet ruled on Sternberg).
The 9th Circuit has overruled the BAD old law made in the Sternberg case. Sternberg made it nearly impossible for people suing abusive creditors to find lawyers to take the case. Why? Sternberg said that the lawyers could not recover fees for their work on the case from the defendant. Sure the injured debtor could pay the lawyer fees up front, but nearly one ever could. This let big business act without punishment. Not anymore!
The Ninth Circuit Court of Appeals recently issued an en banc decision “that 11 U.S.C. § 362(k) authorizes an award of attorney’s fees reasonably incurred in a debtor’s prosecution of a suit for damages to provide redress for a violation of the automatic bankruptcy stay.” America’s Servicing Co. v. Schwartz-Tallard (In re Schwartz-Tallard), ___ F.3d. ___, No. 12-60052 (Oct. 14, 2015). The court overruled Sternberg v. Johnston, 595 F.3d 937 (9th Cir. 2010), which held that section 362(k) “allowed a debtor to recover only those fees incurred to end the stay violation itself, not the fees incurred to prosecute a damages action.”
The article says: “Specifically citing NACBA’s amicus brief, the court noted that the goal of preventing violations of the automatic stay would be defeated if debtors could not afford to pursue their right to recovery.” Good for the National Association of Consumer Bankruptcy Attorneys, (an organization of which I am a member).
It’s about time.
To read in more depth visit: http://goo.gl/cS4X1W