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Foreclosure Efforts and Stay Relief

Published On: October 11th, 2012 | Author: Perry Law, P.C. | Category: Bankruptcy Creditors' Rights

 In Kline v. Deutsche Bank, 472 B.R. 98 (B.A.P. 10th Cir. 2012) Deutsche Bank filed a foreclosure complaint and amended complaint against Kline in state court. Shortly thereafter Kline filed a Chapter 13 bankruptcy. Without notice of the bankruptcy action, Deutsche Bank served the amended complaint. After years of litigation the Bankruptcy Appellate Panel held that service of the complaint was void because it violated the automatic stay. However, because Deutsche Bank did not have notice of the bankruptcy action its efforts were not willful and thus sanctions were not warranted. Furthermore, Deutsche’s decision to pause the state court action, rather than outright dismiss it, was not a willful violation either.