An important consumer bankruptcy law issue percolating through the lower federal courts concerns the issuance of emotional distress damages for a willful violation of the automatic stay. The issue of emotional distress damages merits discussion because an egregious willful violation of the automatic stay can leave a debtor traumatized. Consequently, pursuant to Bankruptcy Code §362(k)(1), in order to properly compensate a debtor for the damages that he or she has suffered, a creditor should be compelled to pay a debtor for emotional distress damages.

When a debtor files a bankruptcy petition, the automatic stay arises immediately. Rexnord Holdings v. Bidermann, 21 F.3d 522, 527 (2d Cir. 1994); LaBarge v. Vierkant (In re Vierkant), 240 B.R. 317, 320 (Bankr. 8th Cir. 1999); 11 U.S.C. §362(a). The scope of the automatic stay is broad, and it is intended to prevent all creditor collection activity. In re Cousins, 404 B.R. 281, 286 (Bankr. S.D. Ohio 2009); see also H.R. Rep. No. 95-595 (1977), reprinted in 1978 U.S.C.C.A.N. 5787, 6296-97; S. Rep. No. 95-989 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5835-36. The automatic stay is designed to provide a debtor with a breathing spell so that he or she may reorder his or her affairs. Stringer v. Huet (In re Stringer), 847 F.2d 549, 551-52 (9th Cir. 1988); In re Robinson, 228 B.R. 75, 80 (Bankr. E.D.N.Y. 1998).

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