The Bankruptcy Helpline

The City of Jacksonville cited her for building code violations at one of her properties and placed a lien on it. She tried to refinance the property.

Court held that although Section 362(b)(4) allows a governmental unit to proceed to enforce its regulatory power in spite of 362(a), Congress left the automatic stay in effect as to other subsections, in order to preclude the collection of a fine which is thereafter imposed by that governmental unit against property of the estate. The creation,. perfection of enforcement of a lien against property of the estate does not fall within the exception to the automatic stay.

The court found the stay violation to be willful but ruled that the debtor was not entitled to an award for actual damages other than attorney’s fees and court costs since she failed to produce credible evidence in support of her position that the cloud of title on her homestead prevented her from refinancing.

Related posts:

1. Right to petition for dissolution of LLC was noneconomic interest included in debtor-member’s Chapter 11 estate.
2. A Look at Chapter 7 Bankruptcy Discharge
3. Automatic stay in bankruptcy