11 U.S.C. § 362

A secured creditor is not entitled to relief from a preconfirmation automatic stay for lack of adequate protection when payments toward interest and an equity cushion sufficiently protect its claim.

Prudential Insurance v. Monnier · filed 1985-03-01(d)

Even though the issue may be moot, the parties have not so treated it and we have considered Prudential’s arguments that it was not adequately protected during pendency of the stay. We find these arguments to be without merit. We need not decide whether in all cases a significant equity cushion would be enough to adequately protect a secured creditor, in part because, prior to the final order of confirmation, debtors have paid (or offered to pay) Prudential $75,000 toward unpaid interest. Also, it appears that with the equity cushion described by the bankruptcy court, the value of the Deuel County property as of the confirmation date would have been more than enough to satisfy debtors’ indebtedness to Prudential, including all contract-rate interest that had accrued up until that date.

Section 362(a) makes an action filed against a debtor while the automatic stay is in effect void from its inception; lifting the stay later does not revive that action.

Raikes v. Langford · filed 1985-08-30(a)

Here, there is no dispute that at the time appellants’ complaint in this action was filed a § 362(a) automatic stay order was in effect. The Grayson Circuit Court, therefore, did not have jurisdiction to entertain the action, and thus, it was a nullity and void. ... Thus, the circuit court did not acquire valid jurisdiction over the action initially. Since appellants’ action was void from the date it was filed, it could not be validly revived thereafter.

The automatic stay permits contempt for a party that continues an action in violation of it, but a bankruptcy court lacks jurisdiction to stay a state court’s entry of judgment.

Davis v. Marler (In Re Marler) · filed 1986-03-12(a)

This Court finds that although a bankruptcy court may find a party in contempt for continuing an action in violation of the automatic stay, it does not have jurisdiction to stay an entry of judgment by a state court.

Section 362 does not prevent a state court from entering a final judgment after a bankruptcy filing where the court had already entered findings, conclusions, and a judgment before the filing.

Great Southwest Fire Insurance v. Triple "I" Insurance Services., Inc. · filed 1986-03-19(a)(1)

Triple I contends that this subsequent entry of a final judgment was prohibited by the automatic stay provision of 11 U.S.C. § 362. We disagree. ... We do not believe this provision prevents the state court from entering a judgment in this case.

Section 362(a)(1) does not bar a judgment entered nunc pro tunc that merely formalizes a judicial action taken before the bankruptcy filing.

Oregon Ex Rel. Director of Veterans' Affairs v. Loe · filed 1986-04-17(a)(1)

Because a judgment nunc •pro tunc formalizes an earlier action, it does not constitute either a commencement or continuation of judicial action against the debtor.

Section 362(a)(1) makes a judgment entered against a debtor in violation of the automatic stay void as to that debtor.

Great Southwest Fire Insurance v. Triple "I" Insurance Services, Inc. · filed 1986-10-14(a)(1)

We hold that a judgment entered in violation of the automatic stay provisions of the Bankruptcy Code is void as to the debtor in bankruptcy.

Section 362(a)(1) leaves a state court without jurisdiction over a debtor’s property after a bankruptcy petition triggers the automatic stay, so a default judgment entered during the stay is void.

Bernick v. CABOOSE ENTERPRISES, INC. · filed 1986-11-04(a)(1)

After a bankruptcy petition is filed and the automatic stay is effective, all jurisdiction over the estate of the debtor rests with the bankruptcy court. Consequently, the state court lacked jurisdiction over appellant’s property and the default judgment is void.

Section 362 makes a judgment obtained against a debtor in violation of the automatic stay void, and the judgment may also be void against guarantors whose liability is inseparable from the debtor’s.

Credit Alliance Corp. v. Penn Hook Coal Co. (In re Penn Hook Coal Co.) · filed 1987-01-07(a)(1)

The Court finds further that because the judgment was obtained in violation of 11 U.S.C. § 362 and is therefore void as applied to the Debtor, the judgment is also void as applied to the guarantors.

Section 362(a) does not stay a court from entering its decision after a bankruptcy petition when the parties completed all activity and the court made an oral ruling or took the matter under advisement before the petition.

Jones v. Wilson (In Re Wilson) · filed 1987-05-05(a)

This Court adopts the policy and decision of the Anderson court. Where parties to a proceeding have concluded all activity and the court makes an oral ruling or takes the matter under advisement pre-petition, the entry of a decision post-petition by the court is not an action which is stayed under § 362(a).

Section 362(a)(1) suspends proceedings against the debtor without removing the court’s jurisdiction, and an act violating the stay may be voided when it prejudices parties to the bankruptcy proceeding.

City of Middletown v. Holiday Syrups, Inc. · filed 1987-12-04(a)(1)

This court, however, is persuaded that the applicable principle for this case is correctly stated in International Fid. Ins. Co. v European Am. Bank (129 AD2d 679, 680), as follows: "However, the stay [11 USC § 362 (a) (1)] did not deprive the court of jurisdiction over the action commenced but merely suspended the proceedings [cases cited]. While acts taken in violation of the stay may be voided in appropriate circumstances where they have prejudiced the other parties to the bankruptcy proceeding [cases cited], no such prejudice occurred here [case cited].” ... Similarly, in this case, no prejudice is claimed or demonstrated with respect to other parties to the bankruptcy proceeding in this instance.

Section 362 makes the automatic stay effective when the bankruptcy case is filed and voids a later judgment against the debtor or estate property entered without stay relief, even if the creditor lacked notice of the filing.

Farmers Rice Milling Co. v. Hawkins (In Re Bearhouse, Inc.) · filed 1988-01-22

Pursuant to 11 U.S.C. § 362 the automatic stay became effective on the date the bankruptcy case was filed, March 10, 1987. Any judgment against the debtor or against property of the estate entered after the stay became effective, without first obtaining relief from the stay, is void even if the creditor lacked notice of the filing of the bankruptcy petition.

Section 362(a)(3) and (4) do not bar entry of a judgment on a post-petition claim when it neither seeks estate property nor creates, perfects, or enforces a lien against estate property.

Taylor v. First Federal Savings & Loan Ass'n of Monessen (Appeal of Pennsylvania Department of Public Welfare) · filed 1988-03-31(a)(3), (a)(4)

Therefore entry of the judgment was not a violation of the automatic stay as the Department has not attempted to obtain property of or from the estate nor has it attempted to create, perfect or enforce a lien against the property of the estate.

Section 362’s automatic stay does not deprive a district court of authority to manage or dismiss a stayed case in a manner consistent with the stay’s purpose.

Patricia DENNIS, Appellant, v. A.H. ROBINS CO., INC., Melvin Schwartz, (DR.), Appellees · filed 1988-11-08(a)(1)

The bankruptcy court does not have the power to preclude another court from dismissing a case on its docket or to affect the handling of a case in a manner not inconsistent with the purpose of the automatic stay.

Section 362(a)(1) prevents a valid judgment against a debtor while the automatic stay protects the debtor from litigation.

Culie v. Arnett · filed 1988-11-22(a)(1)

A valid judgment could not be rendered against the employer while it stood protected by the automatic bankruptcy stay; ... the employer’s liability for its servant’s tort and for a debt that might be owed the employer by the insurer has yet to be established.

Section 362(a) does not suspend a state law requirement to extend an existing statutory lien when that extension does not conflict with the automatic stay.

In Re Joan Morton, Debtor. Joan Morton v. National Bank of New York City · filed 1989-01-24(a)

Accordingly, we hold that because this lien fits under the “exceptional cases otherwise” category of Willax and Lockhart, and because extension of the lien as authorized by state law would create no conflict with any provision of the bankruptcy code, § 362(a) by itself did not relieve the bank of the requirement to extend its lien before the initial ten-year period expired.

Section 362(a) does not stay issuance of a postpetition decision when the parties completed all activity and the matter was taken under advisement before the petition.

In Re Teague · filed 1989-04-16(a)

Where the parties to a proceeding have concluded all activity and the Court takes the matter under advisement pre-petition, the entry of a decision post-petition by the Court is not an action which is stayed by 11 U.S.C. § 362(a).

The automatic stay may apply to a state court’s entry of a formal decree after the bankruptcy petition; whether that action is voidable depends on the facts.

McKnight v. Morgan (In re Morgan) · filed 1989-04-20(a)(1)

This Court is not ready to conclude as the Minnesota and Florida bankruptcy courts did that “as a matter of law” the actions by the state court did not violate the automatic stay imposed by the filing of a bankruptcy petition and hence, cannot at this juncture, grant a Motion for Summary Judgment. Further, this Court hastens to add that it is also not ready to conclude that the decree entered by the state court is null and void. The actions may be voidable, but that is a question of fact to be determined on a case-by-case basis.

Section 362 makes a state court judgment entered during the bankruptcy stay ineffective while the stay lasts; after dismissal of the bankruptcy case, the state court may reinstate the judgment by confirming it.

Markham v. Anderton · filed 1990-02-26

At that point the summary judgment was of no effect; and until the stay was lifted, no further action was taken in the district court to enforce the decree of foreclosure. Once the Chapter 11 was dismissed, as a bad faith filing, the district court was asked to confirm the foreclosure orders; this it implicitly did. The foreclosure sale was again advertised and the district court refused the Andertons’ request to postpone it. We hold, following Philippe v. Anderson, supra, that the district court’s orders of June 25, 1987, were reinstated following dismissal of the Chapter 11 proceeding.

Section 362(a)(1) makes a debtor’s appeal bond filed during the automatic stay void.

Nautical Landings Marina, Inc. v. First National Bank in Port Lavaca · filed 1990-06-29(a)(1)

First, with the filing of Nautical’s petition in bankruptcy, the federal bankruptcy code imposed a stay upon the continuation of this proceeding. The stay was imposed October 5,1988, and Nautical filed its appeal bond during the pendency of the stay on November 4, 1988. The filing of that appeal bond vis-a-vis Nautical was void and had no legal effect.

Section 362(a)(7) bars a creditor from unilaterally setting off a prepetition debt during the automatic stay; violating the stay can support denial of postpetition setoff.

Rooster, Inc. v. Raphael Roy, S.R.L. (In Re Rooster, Inc.) · filed 1991-05-16(a)(7)

Given the defendant’s unilateral conduct in violation of section 362(a)(7), its improvement of position, plus its ability to recoup damages for the debtor’s breach of contract, I conclude that the defendant is not entitled to a postpetition setoff on the facts as presented.

Section 362(a) voids a foreclosure conducted during the automatic stay, so the foreclosure purchaser acquires no title to convey.

Graham v. De La Torre · filed 1991-05-23(a)

Pazos properly sought declaratory judgment and return of his purchase money because the automatic stay voided the foreclosure; thus, Rodriguez did not have the property or any right to convey to Pazos.

Section 362 protects a Chapter 7 debtor’s possession of secured property while the automatic stay remains in effect and the creditor has not obtained relief from it.

In Re McNeil · filed 1991-06-24

Retention of the furniture was, more correctly, an instance of the Debtor’s taking advantage of the benefit of the automatic stay in the absence of the creditor’s obtaining relief therefrom.

Section 362(a)(1) bars a district court from transferring a claim filed against a debtor in violation of the automatic stay while the stay remains in effect.

Lampe v. Xouth, Inc., Phillippe G. Woog · filed 1992-02-06(a)(1)

The district court could not transfer the case because any action by the court to transfer the claim while the stay was in effect would have made the court a party to plaintiff’s violation of the stay.

Section 362(a) bars a trial court from entering judgment against a debtor while the automatic stay remains in effect; a judgment entered in violation of the stay is void.

Kliefoth v. Fields · filed 1992-04-14(a)

We hold the trial court’s July 19, 1991, judgment as to Thomson McKinnon violates the bankruptcy court’s automatic stay and is, therefore, void. 11 U.S.C. § 362(a).

Section 362(a)(3) does not prevent a creditor from giving the debtor contractual notice of an indemnification claim when the notice allows the debtor to protect its estate.

The Ltv Corporation v. Gulf States Steel, Inc. Of Alabama · filed 1992-07-20(a)(3)

Neither the language or purpose of the automatic stay provision prevented GSSI from giving notice to LTV under section 9.3.

Section 362 does not prohibit creditors from making legitimate reports to credit agencies about debtors who have filed for bankruptcy.

Hickson v. Home Federal of Atlanta · filed 1992-09-28

Section 362 contains no language prohibiting creditors or any other party from making legitimate reports to credit agencies regarding parties that have filed for bankruptcy.

Section 362 makes court orders entered in violation of the bankruptcy automatic stay void.

Topletz v. Ursa Equity Corporation · filed 1993-05-05

The Court notes that its orders of August 12, 1987 (motion nos. CV-21,507 and CV-21,508) and September 9, 1987 (motion no. CV-21,570) are void as violative of the automatic stay in bankruptcy.

A creditor that repossesses collateral without an approved reaffirmation agreement or relief from the automatic stay violates the stay and may be liable for damages under § 362(h).

In Re Esposito · filed 1993-06-17(h)

A creditor who engages in self-help repossession without a valid, approved reaffirmation agreement or an order lifting the automatic stay violates the automatic stay and, upon motion, engages the provisions of § 362(h).

Section 362(a)(1) does not prohibit filing a formal order after a bankruptcy petition when the judgment became effective before the petition.

In Re Tant · filed 1993-06-07(a)(1)

Therefore, the formal filing of the order on March 26, 1993, was not a violation of the automatic stay.

Section 362(a) stays a tax sale to collect a prepetition tax debt, and a sale conducted in violation of the stay is void from the outset.

Bertini v. Britton · filed 1994-04-08(a)

A tax sale held as a result of a tax debt arising prior to the filing of a bankruptcy petition falls with the scope of the automatic stay provided by 11 U.S.C. § 362(a). ... A tax sale held in violation of a § 362(a) stay is void ab initio and without any legal effect.

Section 362(a) does not prevent an appellate court from dismissing an appeal for lack of jurisdiction when the dismissal does not interfere with the bankruptcy estate or case.

Royal Dynasty, Inc. v. Chin · filed 1994-08-18(a)

Such action, which does not interfere in any way with the property of the bankrupt estate or the bankruptcy case, is not inconsistent with the automatic stay provision.

The automatic stay does not eliminate an existing right of setoff; a creditor may seek relief from the stay to exercise that right.

In Re Medina · filed 1994-10-11

Certainly the automatic stay did not eliminate any right of setoff held by the government and post-petition it quickly asserted that right through filing its motion for relief.

Section 362 stays a trial against a debtor during bankruptcy unless the stay is lifted or modified, and a judgment entered after such a trial must be vacated on direct appeal.

York Center Park District, Cross-Appellee v. Krilich · filed 1994-11-15(a)(1)

Because Krilich Builders and Riverwoods Development were undergoing liquidation in bankruptcy at the time of trial, and the bankruptcy judge had not released or modified the automatic stay, the judgment against them must be vacated.

Section 362(a)(1) stays a state court’s entry of a final order and judgment in a prepetition proceeding, and § 362(a)(5) stays a judgment that creates a lien securing a prepetition claim against the debtor’s property.

In Re Croce · filed 1995-12-28(a)(1), (a)(5)

The stay imposed by the statute is applicable to all entities, including state courts. The entry of a final order and judgment pursuant to a state court proceeding, is the continuation of a judicial proceeding within the meaning of 11 U.S.C. § 362(a)(1). The particular Order and Judgment, entered in this instance, also acted to create a lien against property of the Debtors that would secure a prepetition claim within the meaning of 11 U.S.C. § 362(a)(5).

Section 362(a)(1) makes an action commenced against a debtor during a pending bankruptcy invalid.

Bell v. Niagara Mohawk Power Corp. · filed 1997-06-11(a)(1)

Additionally, the plain meaning of 11 USC § 362 is that the commencement of an action during the pendency of a bankruptcy proceeding is invalid.

The automatic stay requires relief before a state court continues marital property division proceedings after a bankruptcy filing; an expected identical outcome does not excuse proceeding despite the stay.

In re Ebel · filed 1997-07-30

At least for purposes of this portion of the saga, much of the effort incurred by Mrs. Ebel could have been avoided if she had petitioned for relief from stay before continuing with the property division proceedings in the Boulder court. While we agree with the bankruptcy court that, on remand, the property division may well be resolved exactly as it had been by the Boulder court in 1990, that suspicion does not justify allowing the proceedings to go forth in derogation of the automatic stay rights of Mr. Ebel.

Section 362(a)(6) requires an act to collect while the automatic stay is in effect for a violation based on collection activity.

Liptz & Roberts, Chartered Pension Plan Trust v. Stevens (In Re Stevens) · filed 1998-03-19(a)(6)

The undisputed facts show no basis for a finding of the violation of stay. No averment of facts exists to support a finding of an act to collect while the stay imposed by 11 U.S.C. § 362(a)(6) was extant.

The automatic stay prevents a remanded action against the debtor from proceeding in state court while the stay remains in effect.

Verizon Communications, Inc. v. Northpoint Communications Group, Inc. · filed 2001-04-18(a)

Under the automatic stay, the court believes that the case cannot proceed in the Delaware Superior Court.

A default judgment in an action commenced after the bankruptcy petition in violation of the automatic stay is void and cannot be given preclusive effect.

McAdams, Inc. v. Childers (In Re Childers) · filed 2004-06-18(a)(1)

Since the small claims action was filed after the bankruptcy petition, the default judgment entered in the small claims action is void, and this Court will not give that judgment preclusive effect.

Entry of judgment on a jury verdict is a judicial act barred by the automatic stay, and a judgment entered during the stay is void and cannot be validated by a subsequent order lifting the stay.

in Re Maryam Jamilah · filed 2005-07-21(a)(2)

Entry of judgment in this case is therefore a distinctly judicial act involving judicial discretion, rather than a merely ministerial act. ... The trial court entered its final judgment after Relator filed her bankruptcy petition and while the automatic stay was in effect. We therefore hold that the final judgment is void. ... Wachovia Bank next contends that the bankruptcy court’s subsequent order lifting the stay retroactively validates the trial court’s final judgment. We disagree. A void judgment is a nullity and cannot be resurrected.

A postpetition state-court judgment approving settlement stipulations has no preclusive effect against the debtor because of the automatic stay.

Empresas Inabon, Inc. v. Gotay (In Re Empresas Inabon, Inc.) · filed 2006-07-12

In the case at bar, Empresas Inabón filed its petition for reorganization under chapter 11 of the Bankruptcy Code on August 6, 1996. The partial judgment approving the stipulations entered in the cases before the Superior Court of Ponce was entered on August 7, 1996. Therefore, the partial judgment of the Superior Court is not res judicata to the issues raised in this proceeding as they relate to debtor Empresas Inabón.

Section 362(a) makes a state-court turnover order void when it affects property at issue in bankruptcy proceedings while the automatic stay is in effect.

Black v. Shor · filed 2013-04-18(a)

Accordingly, the turnover order of August 11, 2011, which purports to affect the same property that was at issue in the bankruptcy proceedings, is void because it was issued in violation of the bankruptcy stay.

Section 362’s automatic stay does not prevent a creditor from filing a notice to renew a judgment against the debtor.

El Reno Housing Associates LP v. Cowen · filed 2014-06-12(a)

Judgment Creditor was not prevented from renewing its judgment during the duration of the stay.

An order signed before the automatic stay is void if state law requires filing for entry and the order is filed during the stay.

MILLER Et Al. v. LOMAX Et Al. · filed 2015-07-08(a)(1)

As a result, unlike the judgment in Rexnord Holdings that operated to “conclude” that proceeding even though it had not yet been filed, the signed withdrawal order in this case was a nullity because it was not filed at a time when the trial court had the ability to exercise judicial power in the case.

Section 362's automatic stay renders a foreclosure judgment entered after the debtor files for bankruptcy void.

CitiBank, N.A., not individually etc. v. Unknown Heirs, Beneficiaries · filed 2016-07-25

Because the record of the trial court proceedings demonstrates that the judgment at issue was entered the day after the defendant/debtor’s petition for bankruptcy was filed in federal court, the judgment was entered during the pendency of the automatic stay imposed by 11 U.S.C. § 362. The judgment was therefore void.

A postpetition judgment entered without relief from the automatic stay receives no preclusive effect.

Richard N. Berkshire · filed 2025-07-07

It was entered post-petition without relief from the automatic stay. ... The majority hold such a judgment is void. ... A void judgment cannot have preclusive effect. ... The county court judgment will not be given preclusive effect in ruling on the U.S. Trustee’s motion.

Section 362(a)(1) bars entry of default judgment against an individual debtor while the automatic stay is in effect.

Guler · filed 2026-03-31(a)(1)

The automatic stay plainly bars the Court from entering default judgment against Shawn and Janine Cutting individually.

Section 362(b)(3) allows a mechanic’s lien claimant who provided labor and materials before bankruptcy to record the lien after the property owner files for bankruptcy without violating the automatic stay.

Pioneer Construction, Inc. v. Global Investment Corp. · filed 2011-12-21(b)(3)

A mechanic’s lien claimant who provided labor and materials prepetition to a debtor in bankruptcy can record a mechanic’s lien after the property owner files for bankruptcy without violating the automatic stay. (11 U.S.C. § 362(b)(3).)

Section 362(b)(3) permits perfection of an appropriately earned mechanic’s lien despite the automatic stay when state law gives the lien relation-back priority.

LoPriore v. Imperia Bros. (In Re LoPriore) · filed 1990-06-20(b)(3)

Initially it should be observed that an appropriately earned mechanic’s lien is not stayed from perfection by the automatic stay imposed under 11 U.S.C. § 362(a), because 11 U.S.C. § 362(b)(3) provides for an exception based on 11 U.S.C. § 546(b) and permits such liens to relate back to the time of the underlying debt’s creation as provided by Section 13(5) of the New York Lien Law, which gives a lienor who provided supplies and labor four months after the completion of the work, priority over any security interests created during the intervening four months.

Section 362(b)(3) permits postpetition perfection of a mechanic’s lien when state law makes the lien relate back to the time the work was performed.

Fitch v. Jones & Lamson MacHine Co. (In Re Jones & Lamson MacHine Co.) · filed 1990-04-30(b)(3)

Thus, the filing of the notices of intention to hold liens was merely the final step towards perfecting the plaintiffs’ interest in the debtor’s property, an interest which arose as of the date the plaintiffs performed work for the debtor.

Section 362(a)(3), (4), and (5) prohibits filing a mechanic’s lien after a bankruptcy petition for goods and services allegedly provided before the petition.

In Re M & J Feed Mill, Inc. · filed 1990-04-11(a)(3), (a)(4), (a)(5)

The filing by Mr. Johnson of the mechanic’s lien for such goods and services allegedly provided pre-petition is a violation of the automatic stay of § 362(a)(3), (4), and (5).

Section 362(b)(3) does not stay suppliers from asserting mechanics’ liens that relate back under state law after a debtor files for Chapter 11.

Armstrong World Industries, Inc. v. James A. Phillips, Inc. (In Re James A. Phillips, Inc.) · filed 1983-03-28(b)(3)

The suppliers’ right to assert liens under state law is not stayed by the debtor’s chapter 11 petition. Rather, § 362(b)(3) and § 546(b) of the Bankruptcy Code, 11 U.S.C. § 362(b)(3), § 546(b), permit such liens to “relate back” to the time of the underlying debt’s creation as provided by New York Lien Law § 13(5) (McKinney’s 1982).

Section 362(b)(3) excepts post-petition notice to perfect a mechanics’ lien from the automatic stay when applicable state law makes perfection relate back to a pre-petition date under § 546(b).

Yobe Electric, Inc. v. Graybar Electric Co. (In Re Yobe Electric, Inc.) · filed 1983-04-27(b)(3)

Thus, it is clear that in light of the provisions of Pennsylvania mechanics’ lien law and the case law thereunder, the Subcontractor’s post-petition service of notice of intention to file a mechanic’s claim upon Owner in the case at bar is excepted from the automatic stay of § 362 by operation of § 546(b).

Section 362 does not bar filing a mechanic’s lien after a bankruptcy petition when perfection of the lien relates back under state law to the installation of the first material.

In Re Yobe Electric, Inc., Debtor. Yobe Electric, Inc. v. Graybar Electric Co., Inc · filed 1984-02-23

He pointed out that under that statute the perfection of a mechanic’s lien “relates back” to the installation of the first material, ... and, therefore, concluded that the filing of a mechanic’s lien does not violate the automatic stay provisions of the Bankruptcy Code. ... We will affirm the judgment of the Bankruptcy Court on the basis of the well-reasoned opinion of the bankruptcy judge.

Section 362(b)(3) permits filing a mechanics’ lien statement after bankruptcy to perfect the lien when § 546(b) protects that perfection.

Schiffer v. Arvada Steel Fabricating Co. (In Re Cantrup) · filed 1984-03-06(b)(3)

This Court agrees with and adopts the reasoning of Judge Schwartzberg in the case of ... where he analyzes the inter-relationship of sections 362(b)(3) and 546(b) and concludes that the filing of a mechanics’ lien statement against the property of a debtor to perfect the mechanics’ lien does not violate the automatic stay.

Section 362(b)(3) permits perfection of a materialman’s lien after a bankruptcy filing when generally applicable law makes the perfection effective against earlier interests.

Rooks v. Peek Construction Co. (In Re Peek Construction Co.) · filed 1986-12-09(b)(3)

The Court concludes that the failure of both McCurdy and Allied to take the steps required to perfect their materialman’s liens is not excused by the intervening bankruptcy filing by Peek Construction Company. Section 362(b)(3) expressly permits such perfection in spite of the entry of an order for relief.

Section 362(b)(3) permits postpetition perfection of a lien only when applicable nonbankruptcy law gives it prepetition effect against a hypothetical lien creditor.

Matter of Maas · filed 1986-12-29(b)(3)

Based on the foregoing, the post-petition recordation of the claim of lien by the Association constituted a violation of the automatic stay because under Florida law § 718.116(4), the type of lien involved here is only effective when it is recorded in the public records.

Section 362(b)(3) does not except postpetition recording of a Massachusetts written-contract labor or materials lien that comes into existence only upon recording.

In Re Bible Speaks · filed 1986-12-18(b)(3)

These liens appear to come into existence only at the time of such recording. No such recording was made prior to the Chapter 11 filing. Any attempt to make a recording thereafter would be barred by the automatic stay, without benefit of the exceptions contained in § 362(b)(3) and without any apparent cause favorable to terminating the stay.

Section 362(a)(4) prohibits recording an agreement after the bankruptcy petition to assert an operator’s lien against the debtor’s property.

Wilson v. TXO Production Corp. (In Re Wilson) · filed 1987-02-13(a)(4)

The recording of this latter agreement, to the extent that it asserts an operator’s lien, is in violation of the automatic stay provisions of 11 U.S.C. § 362(a)(4).

Section 362(a)(4) stays acts to perfect liens against estate property, and actions taken in violation of the stay are null and void.

In Re Smith · filed 1987-04-08(a)(4)

Prudential’s request for a receiver in state court for the purpose of perfecting a lien on the crops was clearly contrary to the protective provisions of 11 U.S.C. § 362. It is a well-established rule that actions taken in violation of Section 362 are null and void.

Section 362(a)(4) stays postpetition recordation and endorsement of a ship mortgage as acts to perfect a lien against estate property, and each act must independently qualify for the § 362(b)(3) exception.

In Re Pasquale Alberto, Debtor. Appeal of Maryland National Bank · filed 1987-06-30(a)(4), (b)(3)

Because both the act of recordation and the act of endorsement thereafter come within the stay provisions of § 362(a), it is not sufficient for the Bank to show that the endorsement of the vessel’s documents following recordation of the mortgage was an act qualifying for exclusion under §§ 362(b)(3) and 546(b); it must also appear that the act of recording similarly qualified for that exclusion.

Section 362(b)(3) permits a materialman to file notice perfecting a lien after the owner files for bankruptcy when the trustee’s rights are subject to § 546(b).

Riley Bldg. Sup. v. First Cit. Nat. Bank · filed 1987-07-15(b)(3)

We do not understand that stay, however, to prohibit a party such as Riley from filing the notice of its materialman's lien under Section 85-7-131. Contrary to Riley's assertion, Section 362(b)(3) of the Bankruptcy Act, 11 U.S.C. § 362(b)(3), specifically exempts from operation of the stay "... any act to perfect an interest in property to the extent that the trustee's rights and powers are subject to ... § 546(b) of this title."

Section 362(b)(3) permits a postpetition attempt to perfect a lien despite the automatic stay to the extent the trustee’s rights are subject to that perfection under § 546(b).

Poloron Products of Bloomsburg, Inc. v. Sands (In Re Poloron Products of Bloomsburg, Inc.) · filed 1987-07-30(b)(3)

Defendant’s Mechanic’s Lien claim, which was filed after plaintiff filed its petition in bankruptcy, is ... not barred by § 362(a) of the Bankruptcy Code to the extent that it is an attempt to perfect a lien to which the Trustee’s rights and powers would be subject under § 546(b).

Section 362 does not bar filing a notice of pendency that merely continues an existing mechanic’s lien.

Kraft v. Fisk Associates (In Re Millerlee Corp.) · filed 1987-02-27(b)(3)

Since the filing of a notice of pendency only continues the original mechanic’s lien, which itself relates back to the date the work was completed (see N.Y. Lien Law §§ 17 & 13(5)), the filing cannot violate the automatic stay.

Section 362(b)(3) excepts filing a mechanics’ lien statement to perfect the lien from the automatic stay, but does not except an action to enforce or foreclose the lien.

Northwest Wholesale Lumber, Inc. v. Citadel Co. · filed 1990-06-12(b)(3)

Thus, while filing a lien statement is an act to perfect a lien which is excepted from the automatic stay, ... an action to enforce or foreclose the lien is not excepted, ... Thus, the exception provided by 11 U.S.C. § 362(b)(3) does not apply.

Section 362(b)(3) excepts timely postpetition perfection of a mechanics’ lien that arose before the bankruptcy petition from the automatic stay.

In Re U.S. Electric, Inc. · filed 1990-11-29(b)(3)

Basic’s liens arose, although unper-fected, prior to the Debtor’s petition for bankruptcy relief. The filing for record of an affidavit for a mechanics’ lien merely perfect the lien. This action by Basic is precisely within the purpose of § 362(b)(3), provided this post-petition perfection occurs within the prescribed statutory period.

Section 362(b)(3) permits postpetition perfection of a mechanic’s lien when the creditor follows § 546(b); if state law requires commencing an action to perfect the lien, the creditor must give notice instead of commencing the action.

Roofing Concepts Inc. v. Kenyon Industries, Inc. (In re Coated Sales, Inc.) · filed 1991-02-13(b)(3)

If the “Petition to Enforce Lien” is required for perfection, RCI was required to give notice pursuant to § 546(b) in lieu of commencing an action. Instead, RCI commenced an action and thus violated the stay. Alternatively, if the enforcement provision is not necessary for perfection, the enforcement action commenced by RCI is a clear violation of § 362(a).

Section 362(b)(3) excepts perfection of a mechanic’s lien from the automatic stay when the lien relates back to the date the underlying debt arose.

Denoyelles Co. v. Requa Electrical Supply Co. · filed 1992-09-21(b)(3)

Further, it is clearly established that 11 USC § 362 (b) (3) provides for an exception to the stay provisions where, as in New York, the lien relates back to the date of the underlying debt’s creation.

A creditor’s violation of the automatic stay does not prevent it from later perfecting its lien by timely notice under Section 546(b).

Roofing Concepts, Inc. v. Kenyon Industries, Inc. (In Re Coated Sales, Inc.) · filed 1992-12-01(b)(3)

Nothing in Section 362(b) or 546(b), however, indicates that Roofing’s violation of the stay precludes it from perfecting its lien by giving notice pursuant to Section 546(b).

Section 362(a)(5) voids postpetition mechanic’s liens on Ohio public works projects when the liens take effect only upon filing and do not relate back before the petition.

In Re Wm. Cargile Contractor, Inc. · filed 1993-03-03(a)(5)

The significance of our determination that mechanic’s liens filed with respect to public works projects are effective when filed and do not relate back is that in the present case, the liens filed postpetition violate the automatic stay pursuant to § 362(a)(5), and are therefore void.

Section 362(b)(3) excepts recording a mechanics’ lien from the automatic stay when it perfects a contractor’s vested pre-petition right.

Cocolat, Inc. v. Fisher Development, Inc. (In Re Cocolat, Inc.) · filed 1995-01-11(b)(3)

The Court further notes that recording a mechanics’ lien is not considered an act to enforce the contractor’s claim, merely an act to perfect it. For this reason, and because the contractor’s right to perfect its lien is a vested pre-petition right, the recor-dation of the lien is excepted from the bar of the automatic stay.

Section 362(a)(1) requires a pending subcontractor mechanic’s lien action to abate when the debtor contractor is a necessary party, until the stay ends or the bankruptcy court grants relief.

Concrete Products, Inc. v. Centex Homes · filed 1999-12-03(a)(1)

Applying the same reasoning to the situation in which the contractor files for bankruptcy during the pendency of the subcontractor’s lien enforcement action, the proceedings must abate until such time as the stay is terminated or the subcontractor receives other relief from the bankruptcy court.

Section 362 stays steps to create or enforce a Georgia mechanics’ lien, including filing the required notice of action; the exception for acts of perfection does not cover those steps.

In Re Durango Georgia Paper Co. · filed 2003-03-31(a)(4), (b)(3)

Pursuant to the following discussion, I hold that upon the filing of Durango’s bankruptcy case, the automatic stay applied to stay any action to “make good” the lien at issue, including the notice filing required under Georgia law, and that accordingly, the extension provided in § 108(c) is applicable.

Section 362(b)(3) excepts Georgia mechanic’s lien perfection requirements from the automatic stay, so creditors must satisfy those requirements within the applicable state-law deadlines.

Durango Georgia Paper Co. v. Milton J. Wood Fire Protection, Inc. · filed 2005-11-28(b)(3)

If that court permitted this perfection pursuant to Section 546(b) to defeat a trustee’s avoidance powers, it is consistent to conclude that the automatic stay cannot apply to prevent a creditor from exercising those Section 546(b) rights. ... As a result, this Court concludes that because the Georgia Lien Statute’s requirements are acts required of perfecting and not creating or enforcing a lien, creditors are required to abide by the requirements if they wish to receive the protection of relation back perfection under Section 546(b).

Section 362 stays foreclosure of a perfected Nebraska mechanic’s lien because foreclosure enforces the lien rather than maintaining or continuing its perfection and therefore falls outside the perfection exception.

In Re WorldCom, Inc. · filed 2007-02-23(b)(3)

The Court finds that the Foreclosure Action is not an act to maintain or continue perfection of a lien. The purpose of the Foreclosure Action is to enforce a lien and is not related to perfection. ... Section 546(b)(2) is not applicable to the Foreclosure Action and, as a result, the Foreclosure Action was subject to the automatic stay of section 362.

Section 362’s automatic stay does not prohibit a materialman from filing the notice of commencement required to preserve a lien after filing a proof of claim in the contractor’s bankruptcy proceeding.

Action Concrete v. Portrait Homes — Little Suwanee Point, LLC · filed 2007-06-04

Hence, federal bankruptcy law placed no barrier upon Action Concrete’s ability to timely file a notice of commencement after filing its proof of claim, and its failure to do so rendered its lien unenforceable.

Section 362(b)(3) permits perfection of a mechanic’s lien but does not permit an enforcement action even when state law requires that action for perfection, in which event notice under section 546(b)(2) must substitute for the action.

In Re Cook · filed 2008-01-11(b)(3)

As discussed above, although Section 362(b)(3) allows a mechanic’s lien claimant to take the steps required for perfection, no allowance is made for commencement of an enforcement action, even if such an action is required for perfection, as it is under Alabama law. However, when commencement of an enforcement action is required and bankruptcy intercedes, it is replaced by mandatory notice given pursuant to Section 546(b)(2).

Section 362 stays enforcement of a North Carolina materialman’s lien but permits timely notice under section 546(b) to preserve the lien when no relief from the stay is obtained.

Schafer v. Carolina Kitchen & Bath, Inc. (In Re Orndorff Construction, Inc.) · filed 2008-08-25(a)(4), (b)(3)

Since Section 362(a)(4) prevents the filing of such an action, unless the materialman obtains relief from the automatic stay to file the action, Sections 362(b)(3) and 546(b) compel the materialman to give timely notice to preserve his statutory lien.

Section 362(b)(3) permits postpetition perfection of an Illinois mechanics lien because perfection relates back to the contract date and falls within section 546(b).

In Re Cramer · filed 2008-09-12(b)(3)

Lifting the stay was unnecessary because the stay did not bar post-petition perfection of the lien. ... The automatic stay exempts from its coverage perfection of an interest in property where the trustee’s rights and powers are subject to such perfection under section 546(b). ... The Illinois Mechanics Lien Act is such a generally applicable law, since perfection of a lien under that Act relates back to the date of the contract.

Section 362(b)(3) does not except postpetition perfection of a mechanic’s lien from the automatic stay when the lien arose from work performed after the bankruptcy filing and perfection cannot relate back to a prepetition date.

In Re Means · filed 2011-07-08(b)(3)

Therefore, because no work was performed by Orion until well after the filing of Debtors’ case, the perfection of Orion’s lien could not relate back to any pre-petition point in time, despite the fact that the debt is treated as a pre-petition claim for other purposes. For the reasons set forth above, Orion’s perfection action is not excluded from the automatic stay by virtue of section 362(b)(3), and Orion is not entitled to relief from stay.

Section 362(a)(4) stays efforts to enforce a mechanic’s lien against estate property, including a suit to enforce the lien under Missouri law.

Trilogy Development Co. v. BB Syndication Services, Inc. · filed 2011-12-29(a)(4)

Therefore, § 362(a)(4) stayed any efforts on Gould Evans’ part to enforce its mechanic’s lien.

Section 362(a)(6) bars a creditor from freezing a debtor’s bank account to preserve funds for collection of its claim, even if the freeze is not a setoff.

Cusanno v. Fidelity Bank · filed 1983-05-13(a)(6)

Furthermore, § 362(a)(6) places a stay upon “any act to collect, assess, or recover a claim against the debtor”. By Fidelity’s own admission, it froze the assets of the Cusanno account so that Fidelity might eventually collect a greater share of the loan obligation owed to it by the Cúsannos. Fidelity’s action was thus one to help it collect a claim or recover a claim. Therefore, for the reasons previously noted, the bank’s action violated the automatic stay regardless of whether the freezing of the bank account constituted a setoff.

Section 362(a)(7) stays a bank’s exercise of setoff, but permits a temporary freeze of an encumbered debtor account that neither debits the account nor applies its funds to the debt.

Georgia Federal Bank, FSB v. Owens-Peterson (In Re Owens-Peterson) · filed 1984-04-23(a)(7)

The exercise of the right of setoff is clearly stayed under § 362(a)(7) of the Bankruptcy Code. A permissible “freeze”, on the other hand, involves no debit to the debtor’s account and no application of the funds on deposit against the outstanding indebtedness from the debtor to the bank.

Section 362(a)(7) does not prohibit a bank from placing an administrative freeze on a debtor’s deposit account after learning of the bankruptcy filing.

Hoffman v. Portland Bank (In Re Hoffman) · filed 1985-05-30(a)(7)

In this Court’s view, therefore, it was not a violation of the automatic stay for Portland Bank to place an administrative freeze on the demand account upon the receipt of knowledge of the filing of bankruptcy.

Section 362 permits a creditor with a security interest in a debtor’s checking account to place an administrative hold on the account to preserve its collateral interest pending bankruptcy court action.

Rio v. Army Aviation Center Federal Credit Union · filed 1986-04-28(a)(7)

This Court recognizes that there is a need to balance the interests of the Debtors in assuring that the Credit Union does not violate the provisions of the automatic stay with the need of the Credit Union to preserve its interest in the checking account. ... This Court is of the opinion that the imposition of the administrative hold on the account of the Debtors was a reasonable means by which the Credit Union could assure that the Bankruptcy Court’s options would be preserved and that the Credit Union’s right in the collateral would be adequately protected.

Section 362(a)(7) treats a bank’s prolonged administrative freeze of a debtor’s account as a setoff that violates the automatic stay.

Crispell v. Landmark Bank (In Re Crispell) · filed 1987-05-19(a)(7)

While the mere imposition of an administrative freeze does not in itself violate the stay, the continuation of that freeze for any extended period of time would constitute a setoff in violation of Section 362(a)(7).

Section 362(a)(7) does not prohibit a bank from administratively freezing a debtor’s deposit accounts pending setoff when the bank neither debits the accounts nor applies the deposits to its claim.

National Bank of Georgia, Inc. v. Air Atlanta, Inc. (In Re Air Atlanta, Inc.) · filed 1987-06-02(a)(7)

First, a freeze is not a post-petition setoff prohibited by 11 U.S.C. § 362(a)(7) because there is no debit to the debtor’s account and no application of the funds on deposit to the bank’s claim.

Section 362(a)(7) requires stay relief before a bank sets off a debtor’s account or freezes funds beyond its protected setoff interest.

In Re New York City Shoes, Inc. · filed 1987-10-05(a)(7)

Hence, a bank must obtain relief from the automatic stay pursuant to 11 U.S.C. § 362(a)(7) to consummate a setoff or to proceed to “administratively freeze” all funds except those pertinent to which it has a security or a quasi-security interest which would present a business debtor from utilizing cash collateral.

Section 362(a)(3) does not prohibit a bank from placing an administrative freeze on a debtor’s deposits in these circumstances while seeking permission to set off a prepetition debt.

Air Atlanta, Inc. v. National Bank of Georgia, Inc. · filed 1987-11-25(a)(3)

Having examined the record, the briefs of the parties, and the relevant authorities, the court is of the opinion that the approach used by the bankruptcy court in this case is the correct one, i.e., that an administrative freeze does not constitute a violation of the stay in these circumstances.

Section 362 permits a bank with a valid setoff claim to place an administrative hold on a debtor’s account if it promptly moves for relief from the automatic stay.

In Re Wilde · filed 1988-04-25

Generally, so long as a bank has a valid claim of setoff and promptly files a motion for relief from the automatic stay, its administrative hold on a debtors’ account is not improper.

Section 362 permits a bank to maintain an administrative freeze on funds subject to a potential setoff without immediately moving for relief from the automatic stay.

Craddock-Terry Shoe Corp. v. Crestar Bank (In Re Craddock-Terry Shoe Corp.) · filed 1988-09-15

This reasoning also demonstrates that Crestar was under no obligation to immediately file its motion to lift stay; the debtor itself was obligated to seek court authority under section 363(c)(2)(B) to use the money.

An administrative freeze on a debtor’s bank account does not violate the automatic stay when it preserves the status quo until the parties’ rights are determined.

In Re Learn · filed 1989-01-09

Finally, this Court does not view an administrative hold to be violative of the automatic stay. We believe the better rationale is that an administrative freeze simply preserves the status quo until the rights of the parties may be judicially determined.

A creditor’s voluntary release of deposit funds supplies the consent needed for a debtor to withdraw the funds from an account frozen by the automatic stay without court leave.

Wolinsky v. Central Vermont Teachers Credit Union (In Re Ford) · filed 1989-03-31(a)(7)

We hold that the Credit Union voluntarily surrendered possession of the funds to the Debtors. Under the circumstances, and as between the Debtors and the Credit Union only, such surrender constitutes the kind of consent required to lift the Wildcat freeze and permit Debtors’ removal of the funds from the deposit account without leave of Court.

Section 362(a)(5) and (a)(6) prohibit a creditor from freezing a debtor’s account to collect a prepetition claim or enforce a lien against the debtor’s property.

Figgers v. Dayton Power & Light Employees Federal Credit Union (In Re Figgers) · filed 1990-11-06(a)(5), (a)(6)

Specifically, this court finds that Defendant’s refusal to release the funds to Debtors was an attempt to collect or recover Defendant’s prepetition claim against the Debtors which is prohibited by § 362(a)(6). In addition, Defendant attempted to enforce a lien against Debtors’ property in contravention of § 362(a)(5).

Section 362(a) permits a bank to place a temporary administrative hold on a debtor’s account while the bankruptcy court decides the bank’s motion for relief from the stay and for setoff; the hold is not itself a setoff.

Citizens Bank of Maryland v. Strumpf · filed 1992-03-30(a)

The Court finds that the placing of an administrative hold on an account pending the Bankruptcy Court’s ruling on the Bank’s Motion for Relief from Automatic Stay and for Setoff does not equate to a setoff as a matter of law. In fact, permitting the Bank to freeze the funds until such time as the Court rules on the Bank’s Motion for Relief from Automatic Stay and for Setoff is the only sensible procedural approach under these circumstances.

Section 362(a)(3) does not prohibit a bank from temporarily withholding Chapter 7 debtors’ access to their account to preserve the funds pending verification of an exemption when the bank claims no right of setoff.

In Re Pimental · filed 1992-06-17(a)(3)

Upon consideration of the oral and written arguments of the parties, and based on the record before us, we find that the Bank of Newport’s (temporary) refusal to provide the Debtors access to their checking account was not a violation of 11 U.S.C. § 362.

Section 362(a)(7) does not treat an account freeze as a prohibited setoff when the creditor has not applied the frozen funds against the debt.

In Re Lough · filed 1994-01-07(a)(7)

Lastly, the freeze was not a setoff in violation of section 362(a)(7). ICCU has not applied the funds in the account against the obligation owing to it.

Section 362(a)(7) does not prohibit a temporary account freeze that preserves the status quo when the creditor takes no affirmative action to complete a setoff.

United States v. Merritt (In Re Merritt) · filed 1995-09-08(a)(7)

In this case, the freeze on the debtor’s commissary account merely preserved the status quo of the parties to allow the Court an opportunity to determine the proper disposition of the funds, and prison officials took no action during pendency of the bankruptcy proceedings to remove the funds from the debtor’s commissary account. Under the reasoning of Laux, in the absence of proof that prison officials actually exercised their right of set-off, the debtor’s claim of violation of the automatic stay must fail.

Section 362 requires a creditor with notice of bankruptcy to ensure that prepetition bank-account restraints are released, and a willful failure to do so requires an award of actual damages under subsection (h).

In Re Parry · filed 2005-08-05(a)(2), (h)

By failing to coordinate with North Fork Bank or otherwise take the necessary steps to ensure that the liens on Ms. Parry’s accounts were immediately released, Sharinn and Lipshie willfully violated the automatic stay. ... As Sharinn and Lipshie willfully violated the automatic stay, the Court must award Ms. Parry actual damages pursuant to § 362(h).

A creditor with knowledge of the bankruptcy filing that fails to ensure prompt release of its restraint on the debtor’s bank account willfully violates the automatic stay and must pay resulting actual damages.

In Re Henry · filed 2005-08-05(a)(2), (h)

It is well settled that a creditor has an affirmative duty under § 362 to take the necessary steps to discontinue its collection activities against a debtor. ... By failing to coordinate with Chase Bank or otherwise take the necessary steps to ensure that the lien on Ms. Henry’s account was immediately released, Sharinn and Lipshie willfully violated the automatic stay. ... As Sharinn and Lipshie willfully violated the automatic stay, the Court must award Ms. Henry actual damages pursuant to § 362(h).

Section 362 requires a creditor with notice of bankruptcy to take the necessary steps to release its restraint on the debtor’s bank account, and a willful failure to do so requires an award of actual damages under subsection (h).

In Re Wright · filed 2005-08-05(a)(2), (h)

It is well settled that a creditor has an affirmative duty under § 362 to take the necessary steps to discontinue its collection activities against a debtor. ... As Sharinn and Lipshie willfully violated the automatic stay, the Court must award Ms. Wright actual damages pursuant to § 362(h).

Section 362(a)(3) prohibits a bank without a right of setoff from administratively freezing a Chapter 7 debtor’s bank accounts pending trustee instructions, because denying access to the funds exercises control over estate property.

Jimenez v. Wells Fargo Bank, N.A. (In Re Jimenez) · filed 2005-12-21(a)(3)

Denying access to account funds is an exercise of control over property and violates the express language of § 362(a)(3). ... Wells Fargo has expressly and wilfully violated the stay provision of § 362(a)(3), and is not excused by its policy ostensibly created to comply with the turnover provisions.

A bank violates the automatic stay by continuing to freeze a Chapter 7 debtor’s accounts under a prepetition restraining notice while leaving release entirely to the judgment creditor.

In Re Adomah · filed 2006-03-31(a)

Bank of America violated the automatic stay by freezing the Debtor’s Accounts and doing nothing more than to put the responsibility on a third party.

Section 362 does not prohibit a reasonable, temporary administrative hold on a debtor’s bank accounts that maintains the status quo and preserves estate property while the bank awaits the trustee’s instructions.

Jernigan v. Wells Fargo Bank, N.A. (In re Jernigan) · filed 2012-08-01

The administrative hold placed by the Bank on the Debtor’s funds was temporary and it was done to maintain the status quo and preserve property of the estate. Since the Bank’s actions did not violate the automatic stay, summary judgment under Rule 56 will be granted and Count 4 will be dismissed.

Section 362(a)(3) does not prohibit a creditor from merely retaining post-petition garnished funds in counsel’s trust account without applying them to the debt.

Foster v. Capital City Credit, Inc. · filed 2023-06-30(a)(3)

Applying Fulton to the case at bar, Defendants did not violate the stay by failing to immediately turn over the funds.

Sections 362(a)(1) and (a)(2) require a creditor with notice of bankruptcy to stay or dissolve a garnishment that continues withholding postpetition funds; failure to act can willfully violate the automatic stay.

William Joseph Namen, II · filed 2023-04-05(a)(1), (a)(2)

For the foregoing reasons, the Court finds the Creditor committed a willful violation of the automatic stay under § 362(a)(1) and § 362(a)(2). ... Under the facts and circumstances of this case, however, the Creditor was required to either stay or dissolve the Writ to prevent the continued post-petition garnishment of funds which altered the status quo.

Section 362(a)(3) does not require a creditor with a prepetition bank garnishment to release frozen funds after a bankruptcy filing if it maintains the status quo.

In re: MARK E. STUART · filed 2021-11-10(a)(3)

Where a creditor has executed a prepetition writ of garnishment against a debtor’s bank account, it is under no affirmative obligation to release the funds and need only maintain the status quo.

The automatic stay is not violated by a creditor’s failure to dissolve a prepetition garnishment when the creditor takes no further action against the account.

Maria Sanz · filed 2021-11-05

If the Bank Account is the Debtor’s property, because GFT did not take any further action with respect to the Bank Account, that failure to act is not a violation of the automatic stay.

Section 362(a)(3) and (a)(6) do not make a creditor’s delay in returning funds received through a completed prepetition wage garnishment a stay violation when the funds never became property of the estate.

Reed v. University Neurosurgical Associates, P.C. · filed 2020-12-02(a)(3), (a)(6)

But the Defendant did not do anything, after the bankruptcy petition was filed, to try to collect its claim against the Debtor. At most, the Defendant merely failed or refused, for a time, to undo a collection action it took pre-petition — the wage garnishment that was done and completed pre-petition. That cannot be deemed a violation of § 362(a)(6). ... The garnished funds received pre-petition by the Defendant were never property of the bankruptcy estate under 11 U.S.C. 541(a)(1), and the automatic stay was not implicated.

Section 362(a) requires a creditor to halt a pending garnishment and return funds received after the bankruptcy filing when the debtor retains an interest in those funds.

Joshua Aaron Newberry · filed 2019-08-15(a)

Consequently, the automatic stay applied to the tax refund, and RPM’s refusal to take steps to halt the garnishment or turn the refund over to Debtor constituted willful stay violations.

Section 362(a) does not require a creditor to return funds garnished before the bankruptcy petition, because retaining those funds is neither post-petition enforcement of a judgment nor control of estate property.

Andrews v. Indirect Purchaser Class (IPC) · filed 2019-07-23(a)

The refusal to return funds garnished pre-petition does not constitute a post-petition enforcement of a judgment or an attempt to control property of the estate because the garnished funds were not available.

Section 362 requires a judgment creditor to cooperate in dismissing a prepetition garnishment, but does not require the creditor’s counsel to prepare the dismissal order in every instance.

In Re Williams-Nobles · filed 2011-10-13(a)

However, this simply means that refusing to dismiss the garnishment is not an option. Counsel for a judgment creditor must agree to endorse the dismissal order, which debtor’s counsel has prepared. As a legal principle, however, compliance with the automatic stay does not mandate that counsel for the judgment creditor undertake the legal work necessary to prepare the dismissal order in every instance.

Section 362(a) does not treat wages garnished under a valid prepetition lien as a violation of the automatic stay merely because the garnishment summons has a postpetition return date.

Partridge v. Meyer, Goergen & Marrs (In Re Partridge) · filed 2001-03-27(a)

The wages garnished pursuant to this lien, having arisen pre-petition, do not violate the automatic stay under 11 U.S.C. § 362(a), notwithstanding the post-petition return date on the garnishment summons.

Section 362 makes postpetition garnishment of wages to collect a prepetition debt void and permits the debtor to recover the garnished wages.

Jackson v. K.A.S. Enterprises, Inc. (In Re Jackson) · filed 2001-03-23(a)(2), (a)(6), (h)

However, the transfer that was the attachment of a lien, and the postpetition Fourth Transfer of wages in the amount of $156.70 is subject to avoidance and recovery by the Plaintiff as a violation of the automatic stay. Acts committed in violation of the automatic stay are void.

Section 362(a) requires a garnishing creditor that receives notice of a bankruptcy filing to take affirmative steps to release an existing wage garnishment, even if the garnishment began before the petition.

In Re Briskey · filed 2001-02-05(a)

It is clear beyond all doubt that garnishing creditors are required to take all necessary action to release their garnishments in order to implement the automatic stay, upon receiving notice of a bankruptcy filing. This is true even if the garnishment process became effective prior to the date of the bankruptcy filing and did not, at the time it first became effective, violate the automatic stay.

Section 362(a) does not require a bank to lift a prepetition garnishment hold as soon as it learns of the debtor’s bankruptcy when the creditor’s lien remains in place; the bank may wait for an order releasing the hold and then act promptly.

Perdew v. First of America, N.A. (In re Perdew) · filed 1998-07-14(a)

The Judgment Creditor’s lien was not avoided by the filing of the Debtor’s bankruptcy petition. Contrary to the Debtor’s assertion, the Bank could not unilaterally lift the hold on the Debtor’s Account, simply because the Bank became aware that the Debtor had filed a bankruptcy petition. ... Pursuant to the foregoing, it is the conclusion of the Court that neither the imposition of the hold on the Debtor’s account, nor the Bank’s inability to remove the hold until April 7, 1997, constitutes a violation of the automatic stay.

Section 362(h) allows actual damages when a creditor continues garnishing a debtor’s postpetition wages after receiving notice of bankruptcy.

Lord v. Carragher (In Re Lord) · filed 1998-03-24(h)

The Court is persuaded that Defendants willfully violated the automatic stay by failing to stop the garnishment of Plaintiffs postpetition wages. Defendants received the Court’s notice of Plaintiffs bankruptcy filing. ... The Court is persuaded that Defendants violated the automatic stay of the Bankruptcy Code and that Plaintiff is entitled to damages under section 362(h).

Section 362(a)(1) requires a creditor’s attorney to stop a prepetition wage garnishment after learning of the bankruptcy; failing to halt its postpetition continuation violates the stay.

In Re Timbs · filed 1994-06-22(a)(1)

With respect to the remaining garnishment episodes, however, this court concludes that Mr. Lufkin, individually, violated the automatic stay when he failed to stop the postpetition garnishment of Mrs. Timbs’ wages. As noted earlier, the courts have widely held that a creditor has an affirmative duty to halt all collection efforts, including garnishments which were set into motion prepetition, once the creditor receives notice of the bankruptcy filing.

Section 362 does not stay enforcement of a default judgment against a garnishee employer when the judgment does not affect the debtor’s property.

Bour v. Johnson · filed 1993-12-09

We agree with the majority rule and hold the automatic stay does not preclude enforcement of a default judgment against a gamishee/employer because the judgment does not affect property of the debtor.

Section 362(a) prohibits entry of an order condemning garnished funds and transfer of those funds to a creditor after the debtor files a bankruptcy petition.

Matter of Yetter · filed 1990-03-22(a)

Several actions were taken in the garnishment proceeding after the filing of the petition in this matter, including entry of the order of condemnation of the funds and transfer of the funds to the Bank. These actions were clearly in violation of 11 U.S.C. § 362(a).

Section 362(a) protects a Chapter 13 debtor’s post-petition wages from garnishment for child support when the confirmed plan keeps those wages in the estate.

Denn v. Aarestad (In Re Denn) · filed 1983-12-08(a)

Therefore, Section 1327(b) does not revest the property of the estate in the debtor in this case, and the post-petition wages of the debtor are protected from the defendants’ actions by the stay provided in Section 362(a). The defendants’ actions in this case in instituting a garnishment program and collecting money thereunder are thus in violation of the stay provided by the Code.

The automatic stay bars postpetition steps to enforce a prepetition garnishment but does not release an interest created by the garnishment before bankruptcy.

In Re City of Wellston · filed 1984-09-12

The filing of a Chapter 9 petition operates as an automatic stay of the commencement or continuation of collection activities involving pre-petition debts. 11 U.S.C. §§ 362 and 922. Therefore, any post-petition actions by these creditors in furtherance of the garnishment process is prohibited by Federal law unless relief from the stay is granted by order of the Bankruptcy Court. The automatic stay provisions do not however, provide a statutory basis to permit the Court to set aside ... or release the interest created by a transfer resulting from a pre-bankruptcy garnishment proceeding.

Section 362(a)(3) prevents a court from proceeding against garnished funds that remain property of a debtor after the debtor files for bankruptcy.

McCarthy v. Pacific Loan, Inc. · filed 1986-05-14(a)(3)

Therefore, since the funds still represent property of the debtor ARL, this court lacks jurisdiction based on 11 U.S.C. § 362(a)(3).

Section 362(a)(1) requires a creditor to stop an ongoing wage garnishment after the debtor files a bankruptcy petition.

Mitchell v. Quality Plant Service, Inc. (In Re Mitchell) · filed 1986-10-20(a)(1)

If one is enjoined from continuing a judicial proceeding against the debtor, one is obliged to discontinue it.

Section 362(a)(6) does not prohibit a creditor from collecting a garnishment default judgment against a debtor’s employer when the employer withheld no wages and collection affects neither the debtor nor estate property.

In Re Gray · filed 1989-03-21(a)(6)

The long and the short of this case is that no property of the estate or Debtor is involved here, and the outcome does not directly or indirectly affect this case or the Debtor’s moneys or his discharge rights. Therefore, this Court lacks either core or related jurisdiction over the moneys withheld, and finds no direct or indirect violation of § 362 or § 524(a). Accordingly, the relief requested by Debtor must be denied.

Section 362 stays enforcement of a prepetition wage attachment but does not extinguish the attachment or change its priority when the stay is lifted.

Rab v. Safeco Insurance Co. of America · filed 1989-04-05(a)(2)

The issue is whether the stay does more than that. Is it only a stopping of payments, or is it also an extinguishment of all attachments? The answer is found in the ordinary and plain meaning of the word stay. It means a stopping or freezing, not extinguishment or eradication.

Section 362(a)(1) requires a creditor that learns of a bankruptcy filing to halt a pending garnishment and restore the status quo after postpetition withholding.

In Re Dungey · filed 1989-05-02(a)(1)

As the foregoing discussion has demonstrated, a creditor has an affirmative obligation to halt all collection activity and restore the status quo which was altered by its actions upon learning of the filing of a bankruptcy petition.

Section 362(a)(6) stays a garnishment proceeding after the debtor files for bankruptcy, including a request for a turnover order against a garnishee that already paid the debtor.

CHICAGO PAINTERS'PENSION PLAN v. Cunha · filed 1990-10-05(a)(6)

Because a garnishment proceeding is simply an "indirect proceeding or act to collect, assess and recover a claim against the debtor," it too must be stayed once a bankruptcy petition is filed. ... The court must respect the stay and cannot issue an order directing Edwards to turn over the funds it paid to Beecher in violation of the garnishment summons.

Section 362(a)(6) stays a postpetition request for a garnishment turnover order against a garnishee when no turnover order was entered before the debtor filed for bankruptcy.

Chicago Painters' & Decorators' Pension, Health & Welfare & Deferred Savings Plan Trust Funds v. Cunha · filed 1990-10-05(a)(6)

Therefore, asking for a turnover order against Edwards at this point would still be considered an action against the bankruptcy estate. The court must respect the stay and cannot issue an order directing Edwards to turn over the funds it paid to Beecher in violation of the garnishment summons.

Section 362(a) does not require a creditor to release a valid prepetition garnishment lien after the debtor files for bankruptcy.

In Re Olivas · filed 1991-07-02(a)

This right to receive adequate protection supports the conclusion that this court cannot impose, in the name of enforcing the automatic stay, an affirmative duty on the creditor to release a lien.

Section 362 bars a creditor from seeking possession of wages withheld by an employer while the debtor retains an interest in those wages, absent modification of the stay.

In Re Waltjen · filed 1993-01-29(a)

However, since Debtor at all times mentioned retained an interest in the withheld wages, the automatic stay imposed by § 362 did prohibit American from pursuing those withheld wages in the absence of stay modification. Thus, after the petition was filed, American was stayed from seeking possession of the withheld wages, and may not do so now.

Section 362(a)(2) stays enforcement of a prepetition garnishment judgment against a garnishee bank when the judgment debtor files for bankruptcy before execution.

Baytown State Bank v. Nimmons · filed 1995-08-24(a)(2)

We hold that the judgment debtor’s chapter 7 bankruptcy filing deprived the trial court of jurisdiction to enforce the judgment in garnishment, and automatically stayed ap-pellees’ right to enforce the judgment in garnishment.

Section 362(a)(2) requires a garnishing creditor to stop enforcement of a prepetition judgment against wages in which the debtor retained an equitable interest when bankruptcy was filed.

Chase Lumber & Fuel Co. v. Koch (In Re Koch) · filed 1996-05-23(a)(2)

At a minimum, Chase Lumber had a duty to stop the completion of what were arguably mere ministerial tasks by Dane County Lumber because those tasks involved the “enforcement ... against property of the estate, of a judgment obtained before the commencement of the case[.]” 11 U.S.C. § 362(a)(2).

Section 362(a) stays postpetition efforts to enforce a prepetition garnishment summons against a debtor’s property held by a garnishee.

DPW Employees Credit Union v. Tinker Federal Credit Union · filed 1996-09-03(a)

We therefore hold that DPWs post-bankruptcy petition efforts to enforce its garnishment summons against the judgment debt- or’s property held by Tinker constituted a clear violation of 11 U.S.C. § 362(a)’s stay provision and that the trial court erred in entering judgment against Tinker for the amount of the garnished funds.

Section 362(a) requires a creditor pursuing a garnishment to take affirmative action to dismiss it after learning of the debtor’s bankruptcy.

In Re Mims · filed 1997-06-25(a)

The proper and required affirmative action is dismissal of the garnishment by the party seeking the garnishment. A creditor pursuing a garnishment simply cannot sit back and wait for the debtor to act because the effect is to continue to deprive the debtor of property in the possession of the garnishee or the state court in violation of the automatic stay.

Section 362(a) requires a creditor to release a wage garnishment as soon as it learns of the debtor’s bankruptcy filing.

In Re Pulliam · filed 2001-05-15(a)

Contrary to Lewis & West’s argument, a garnishing creditor has an affirmative duty to release the garnishment of a debtor’s wages as soon as it learns of the pending bankruptcy.

Section 362(a) bars enforcement of a prepetition wage deduction order against a Chapter 13 debtor’s postpetition wages that are property of the estate.

In Re Rasberry · filed 2001-07-10(a)

Thus, the Court readily agrees that §§ 362(a) and 1306(a)(2) preclude the enforcement of the state court wage deduction order as to the post-petition wages of the Debtor. Therefore, the Court denies the Employer’s request for stay relief at this time, pending further order of the Court.

Section 362(a) requires a creditor that initiated a prepetition garnishment to take affirmative steps to stop it; a notice of stay followed by diligent efforts to halt continued deductions can satisfy that duty.

Buchanan v. First Family Financial Services (In Re Buchanan) · filed 2002-01-28(a)

Because the undisputed facts show that First Family made a good faith effort to stop the garnishment, taking careful and deliberate steps to do so, the Court concludes that it satisfied its obligation to comply with Section 362(a).

Section 362(a)(3) does not require a creditor with a prepetition garnishment lien to release the garnished account at the expense of its lien rights.

In Re Giles · filed 2002-01-24(a)(3)

In this case, the violation of the automatic stay alleged by the Debtor is the failure of a creditor to release a garnished account to the detriment of its lien rights. Under such circumstances, the court concludes that the creditor’s refusal to release its lien did not violate the automatic stay.

Section 362(a)(3) does not require a creditor to turn over funds received after the petition under a prepetition garnishment while its garnishment lien remains unavoided.

Saults v. First Tennessee Bank (In re Saults) · filed 2002-09-11(a)(3)

Based on the foregoing, the court concludes that the defendant’s postpetition receipt of funds garnished prepetition and the defendant’s refusal to turn the funds over to the debtor did not constitute violations of the automatic stay by the defendant.

Section 362(a)(2) and (a)(6) bar a creditor from obtaining and collecting a garnishment judgment against a debtor’s employer after the bankruptcy filing when doing so enforces the creditor’s prepetition claim against the debtor.

In Re Feldman · filed 2003-12-19(a)(2), (a)(6)

Therefore, the Court concludes that the respondent’s acts to obtain and collect on a garnishment judgment against BFC were acts to enforce CAC’s claim against Feld-man and that these acts violated the automatic stay.

Section 362(a)(4) prevents an Illinois continuing wage-garnishment lien from attaching to wages earned after a chapter 13 petition, leaving the creditor’s claim to those wages unsecured.

In Re Earley · filed 2004-03-05(a)(4)

Under Illinois law, the lien that the IWDA confers attaches only when wages are earned. The automatic stay, however, prevents the lien from attaching to wages earned post-petition. With no collateral securing the lien, the creditor’s claim must be deemed unsecured.

A creditor with notice of bankruptcy willfully violates the automatic stay by failing to dismiss a prepetition bank garnishment while also failing to seek adequate protection within a reasonable time.

Roche v. Pep Boys, Inc. (In Re Roche) · filed 2005-12-29(a)(1), (a)(2), (h)

For the reasons stated herein, the Court finds that Defendant Pep Boys’ failure to dismiss the garnishment in conjunction with the failure to seek adequate protection within a reasonable time period, constitutes a willful violation of the automatic stay.

Accepting a postpetition payment from a third-party garnishee does not establish a violation of Section 362(a)(1) or (6) without evidence of continued collection efforts or payment by the debtor.

Kramer Consulting, Inc. v. McCarthy (In Re McCarthy) · filed 2006-09-28(a)(1), (a)(6)

The court finds that the plaintiffs receipt of a check from TFP does not constitute a collection of a debt directly from the debtor. ... The court therefore determines that the defendant has not met his burden of showing that the plaintiffs acceptance of the TFP payment was a violation of the automatic stay.

Collecting wages through post-petition sequestration violates the automatic stay, and retaining those wages after learning of the stay makes the violation willful, entitling the debtor to actual damages, costs, and attorney’s fees.

Preston v. GMPQ, LLC. (In Re Preston) · filed 2008-10-07(a)(1), (a)(5), (a)(6), (k)(1)

The collection of the two post-petition sequestered wages constituted a violation of the automatic stay under § 362(a)(1), as a continuation of judicial action against the debtor that was commenced pre-petition; under § 362(a)(5), as an act to enforce against property of the debtor a lien that secured a claim that arose pre-petition; and under § 362(a)(6), as an act to collect a claim against the debtor that arose pre-petition. ... Accordingly, since Defendant had knowledge that the automatic stay of § 362(a) was effective at least beginning April 18, 2008, Defendant’s collection and retention of Plaintiffs sequestered wages subsequent to this date constituted a willful violation of the stay under § 362(k)(l), entitling Plaintiff to recover actual damages, including costs and attorney’s fees.