Nebraska Bankruptcy Courts

The protection provided by the provisions of Section 362 (Automatic Stay) becomes operative upon filing, regardless of actual notice. Thereafter, creditor actions for collection are prohibited, subsequent court judgments are moot, and seizures are rendered void. Before actual notice is provided to creditors, courts tend to allow a modest degree of leeway for any creditor who accidentally violates the stay provision. However, after notice, truculent creditors who knowingly violate Section 362 raise the ire of the Nebraska Bankruptcy Court, and sanctions for contempt of court are common. Because of the prevalence of creditor misconduct, the Nebraska courts seldom tolerate feeble excuses. Ubiquitous creditors who file excessive dilatory motions may be punished. However, also be aware that new amendments to the Code only speak to Debtor misconduct, and conspicuously omit reference to creditor misconduct in the same or similar circumstances (i.e. any allegation made without "substantial justification").