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Bankruptcy Law

Justices Deny Review of Bankrupt Debtor’s Bid to Sanction Lender

Jan. 19, 2021, 2:35 PM

The U.S. Supreme Court declined to review a New Jersey woman’s motion for sanctions against her auto-lender for refusing to return her repossessed car without a court order after she filed for bankruptcy.

The justices’ order follows their Jan. 14 ruling in Chicago v. Fulton that creditors don’t violate the automatic stay under a subsection of the bankruptcy code merely by holding onto property that was lawfully repossessed or impounded before the bankruptcy.

Section 362(a)(3) of the bankruptcy code, which prohibits creditors’ acts to exercise control over bankruptcy estate property, doesn’t create an affirmative obligation to return the property, the...

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