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Carlos J. Cuevas

The automatic stay contained in Bankruptcy Code Section 362(a) is fundamental to the effectiveness of the consumer bankruptcy system. Most creditors observe the automatic stay, and refrain from engaging in debt collection activity after a bankruptcy petition has been filed. If there is a doubt as to the applicability of the automatic stay, then a creditor can obtain a comfort order as to the applicability of the automatic stay, or obtain relief from the automatic stay from the Bankruptcy Court.

Nevertheless, there are some minute instances in which some creditors have acted in derogation of the automatic stay and they have continued with their debt collection activity after receiving actual notice of the commencement of a bankruptcy case. In certain limited instances, some creditors have committed egregious violations of the automatic stay to warrant the imposition of punitive damages, not only to compensate the victim but also to vindicate the consumer bankruptcy system.

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