Can a Bankruptcy Trustee or Creditor “Break Into” My House to Take My Property?

Many Florida residents struggling to pay their debts are understandably worried that a creditor–or even the police–might show up on their doorstep to seize their property as payment. This is not an unfounded fear. Florida law allows a secured creditor to obtain a court order to seize any collateral without notice to the debtor. For example, such an order allows a lender to seize a debtor’s car if they default on their car loan.

There are also situations where a creditor holding a civil judgment may ask a judge to issue what is known as a “break order.” This is literally a command to the local sheriff to break into and enter a debtor’s home to seize property that may be used to satisfy the creditor’s judgment. Break orders are rarely issued, however, and are used largely when a debtor refuses to cooperate at all with the legal process.

Bankruptcy Trustee Has Marshals Seize Documents from Uncooperative Debtor

Filing for bankruptcy will temporarily halt any creditor collection efforts, including enforcement of any break orders. That said, if the debtor refuses to cooperate with the bankruptcy court, they can find themselves the target of a break order issued by the bankruptcy court itself. And there are generally no legal remedies available to debtors in these scenarios.

A recent decision from the United States Court of Appeals for the 11th Circuit, Juravin v. Florida Bankruptcy Trustee, provides a useful example. In this case, a Florida debtor filed for bankruptcy after a federal court entered a $25.2 million judgment against him in a civil lawsuit brought by the Federal Trade Commission. The bankruptcy proceedings went on for some time, and about three years into the case, the bankruptcy trustee assigned to the debtor’s estate moved for a break order.

According to the trustee, the debtor failed to voluntarily disclose financial information relevant to the bankruptcy case. As such, the trustee felt it necessary to enter the debtor’s home to photograph and seize any documents related to the debtor’s finances. The bankruptcy court issued the break order. The trustee, accompanied by his attorneys and federal marshals, then entered the debtor’s home and seized various computers and documents.

The debtor’s wife, who was not a party to the bankruptcy case, then attempted to sue the trustee and his attorneys, alleging they seized some of her family’s personal records in violation of their constitutional rights. The 11th Circuit said the wife could not bring such a lawsuit, however, because the trustee and his lawyers enjoyed “judicial immunity” from any actions they took as officers of the court.

Contact an Orlando Chapter 7 Bankruptcy Lawyer Today

While bankruptcy can help you in dealing with creditors, you must still respect and follow all of the procedural requirements imposed by the law and the courts. Otherwise, you may find yourself in a situation like the debtor and his wife in the case discussed above. If you need legal advice from a qualified Orlando Chapter 7 bankruptcy lawyer, contact Florida Law Advisers, P.A., today to schedule a free consultation.

Source:

scholar.google.com/scholar_case?case=9484418435003699663