Berkeley, CA asked in Bankruptcy for California

Q: I am a defendant in a state court complaint filed against me as Pastor where were are a congregational church

Four members filed this in the name of the church as to trying to oust me as Pastor. I am in a confirmed 13 and they are creditors, they filed a motion for no stay, it was granted by default. I filed contempt against for the court order, they filed no opposition, judge did not grant the sanctions he alleges they did not violate the court order but ordered them stayed for proceeding against me in state court for damages as long as i am in the 13. Was the court wrong for denying the sanctions because he alleges they did not violate the stay or order? Can these creditors amend the state court complaint to remove the damages and proceed against the preliminary injunction, r are they bound by the plan under section 1327 regardless if there is no stay? Why do they keep saying there is no stay?

Content added on September 30th, 2011 at 11:24 AM

Please answer my question and state codes and citation

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1 Lawyer Answer
Jeffrey Moore
Jeffrey Moore
Answered
  • Bankruptcy Lawyer
  • Campbell, CA
  • Licensed in California

A: If a creditor files a Motion for Relief from Automatic Stay and it's granted, the creditor can proceed in state court. It does not matter whether the Motion for Relief from Stay was granted by default or after hearing. Most courts would not grant the Motion even by default if it had no merit on its face.

The conduct of a creditor is not wrongful if it was not in violation of the stay, so contempt sanctions would not be granted.

The last part of this question is difficult to answer without more facts but a creditor does not need to amend a state court complaint to remove a prayer for damages if the stay has been lifted as to that matter.

I suggest you retain local bankruptcy counsel to represent you.

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