In a case against a law firm and a loan servicer, a federal appeals court has ruled that debtors may sue to recover damages for emotional distress if creditors break rules against trying to collect while the debtors are under bankruptcy protection.
But the May 8 ruling was a loss for the plaintiffs, who say they became horribly stressed after the defendants erroneously ran a Rockdale County newspaper advertisement saying the home was about to be the subject of a foreclosure. The U.S. Court of Appeals for the Eleventh Circuit panel said the plaintiffs hadn’t provided enough evidence to recover for their emotional distress. The judges also hinted that future plaintiffs might have to back up their emotional distress claims with evidence of physical or financial harm.
