Green Point Credit v. McLean, No. 14-14002 (11th Cir. 2015)
Annotate this CaseGreen Tree appealed the district court's judgment concerning an adversary proceeding that debtors filed against Green Tree in the bankruptcy court. The district court affirmed the bankruptcy court’s ruling that Green Tree violated the discharge injunction under 11 U.S.C. 524(a)(2) by filing a proof of claim in debtors’ instant bankruptcy proceeding to collect a debt that was discharged in their previous bankruptcy proceeding. The order also affirmed the bankruptcy court’s award of both compensatory and non-compensatory sanctions to debtors. Determining that it has jurisdiction over the appeal, the court held that section 524(a)(2) prohibits filing a proof of claim for a discharged debt where the objective effect of the claim is to pressure the debtor to repay the debt. In this case, the bankruptcy court correctly concluded that Green Tree violated the discharge injunction. The court vacated both monetary awards and remanded to the district court with instructions to vacate and remand to the district court. The court concluded that the non-compensatory sanctions were punitive and must be vacated because there is no indication on the record that the bankruptcy court employed the procedural protections owed to an alleged criminal contemnor. The court vacated the compensatory sanctions and directed the district court to instruct the bankruptcy court, upon remand, to reconsider debtors' request for compensatory relief in light of Lodge v. Kondaur Capital Corp.
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