In City of Chicago v. Fulton, the U.S. Supreme Court is poised to rule on whether a creditor must, under the automatic stay provision of the Bankruptcy Code, affirmatively return property to a debtor once she files a petition for relief.

When a debtor files for bankruptcy protection, Section 362 of the code imposes a “stay” of “any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate.” The question, then, is whether this provision also requires a creditor to return the debtor’s property without a court order, i.e., whether the language of Section 362 mandates that the creditor act to return property of the estate once the creditor is on notice of the debtor’s bankruptcy filing. Interestingly, another provision of the Bankruptcy Code (Section 542: titled “Turnover of Property to the Estate”) requires an entity with possession, custody, or control of property of the estate to return such property; the text of Section 362, on the other hand, contains no such return requirement.

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