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Standing up against a “large bureaucracy running amuck,” a Northern District bankruptcy judge has awarded more than $44,000 in legal fees, costs and damages to a debtor who was hounded, bullied and harassed by the federal government for some 14 years. Judge Robert E. Littlefield Jr. of Albany, N.Y., noted that the government’s abuse of Edwin H. Atkins Jr. was so egregious that even the U.S. Attorney assigned to represent Uncle Sam considered the matter indefensible, describing as “torture” the manner in which her employer — the U.S. government — treated Atkins. Judge Littlefield suggested that he struggled to restrain himself from awarding punitive damages, which are not available. In re Edwin H. Atkins Jr., 86-10604/ 00-90144, arises out of a simple fact pattern that somehow became a nightmare for Atkins. It has its roots in a 1979 transaction, when the Farmers Home Administration loaned Atkins money for a home in Johnston, N.Y. A few years later, Atkins realized he could not afford the home and sought to surrender it to the FHA. The underlying note was discharged after Atkins filed for bankruptcy under Chapter 7 of the U.S. Bankruptcy Code. Although the government received a copy of the discharge, it spent the next 14 years harassing Atkins, according to the court. Over the years, the government seized Atkins’ tax refunds, repeatedly demanded payment of discharged debts, perpetually threatened the debtor, commenced a foreclosure action and threatened to report Atkins to credit reporting agencies and federal prosecutors. Throughout, the government insisted it had a right to collect the discharged debt based on a reaffirmation agreement Atkins had apparently signed, but which was never filed with the bankruptcy court. “There is no rationalizing, explaining or defending the government’s actions,” Judge Littlefield wrote. “As strongly as this court feels that the government should be punished for its behavior, both parties agree that punitive damages are not available due to express statutory prohibition … [T]he court must be vigilant to not allow the punitive to creep into the compensatory.” But while the court was precluded from awarding punitive damages, it scolded the government at considerable length. Judge Littlefield said the government’s “misfeasance/malfeasance began prepetition with a bizarre attempt to concoct a reaffirmation agreement” — which it could not do because at the time there was no bankruptcy case pending. It then seized $2,650 in tax refunds, including one that was held for 15 years, a “stunning display of apathy, ignorance or arrogance.” Over time, the government sent at least 14 post-discharge letters, many of them threatening. “Like some reverse Robin Hood, taking from the poor and giving to the rich, the government still has not returned the balance of the seized refund,” the judge wrote. Judge Littlefield said Atkins is entitled to attorneys’ fees of $13,368 because the government willfully violated a court order, namely the discharge injunction, and because “the record is replete with evidence sufficient to support a bad faith finding.” He said the “stream of harassment” had Atkins “paralyzed with fear” and ordered compensatory damages of $30,000. Judge Littlefield also told the government to return Atkins’ $677 1987 tax refund. Mark F. Viencek of Selbach & Viencek in Syracuse appeared for Atkins. Assistant U.S. Attorney Diane Cagino represented the government, raising issues only on the amount of damages.

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