On April 24, 2019, the Supreme Court heard arguments on whether creditors may be penalized for their good faith attempts to collect post-bankruptcy debt in the case Taggart v. Lorenzen. The case concerns a real estate developer who relied on approval by a state court to collect attorneys’ fees post-bankruptcy. The petitioner, Taggart, who was granted a bankruptcy discharge, sought to hold the creditors in contempt for violating the discharge.
This case is unusual because although it arises out of a dispute that began in bankruptcy, the issues do not involve particular provisions of the Bankruptcy Code or federal law, but instead analyzes the federal common law of contempt. Until now, the Supreme Court has not analyzed the state of mind required to find a creditor to be held in contempt of a bankruptcy discharge.
Supreme Court to Weigh Debt Collection Penalties Post-Bankruptcy
Taggart v. Lorenzen
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