Case Type:
Case Status:
Affirmed in part and Reversed in part
16-058 (1st Circuit, Jul 19,2017) Not Published
The Bankruptcy Appellate Panel for the First Circuit Affirmed the United States Bankruptcy Court for the District of Maine's judgment in part finding that the debtor's student loan obligations were not dischargeable in bankruptcy and that the creditor's garnishment was not a willful violation of the automatic stay. The BAP REVERSED and REMANDED the judgment in part with respect to garnishments made after December 2014 as the creditor received notice of the bankruptcy filing and subsequent garnishments may have been willful violations of the stay.
Procedural context:
The debtor, Inga Olsen, appeals from the United States Bankruptcy Court for the District of Maine's judgment in favor of creditor Finance Authority of Maine. The bankruptcy court determined that the debtor's student loan obligations to FAME were excepted from discharge and FAME did not willfully violate the automatic stay by its post-petition garnishment of the debtor's benefits.
In October 2014, the debtor, Inga Olsen, filed a chapter 7 petition. She owed Finance Authority of Maine (FAME) $8,863 on three student loans. The debtor received her discharge in February 2015. Six months later, the debtor moved to reopen the case. In October 2015, the debtor commenced an adversary proceeding against FAME requesting an order discharging her student loans pursuant to section 523(a)(8) and alleging violations of the automatic stay by FAME for continuing to garnish the debtor's social security income after receiving notice of the bankruptcy case. The debtor requested actual and punitive damages under section 362(k).
Bailey, Godoy and Panos

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