Bush), 169 B.R. 34, 36 (W.D. Va. 1994). If a creditor unlawfully repossesses collateral
post-petition without knowledge of the petition and subsequently sells or holds the
collateral after being given notice, then creditor willfully violated the automatic stay and
is liable to debtor for damages. See In re Wright, 75 B.R. 414, 415 (M.D. Fla. 1987).
However, if a creditor lawfully repossesses collateral and disposes of the
collateral completely to another prepetition, then creditor has not violated the automatic
stay at all. See Brown v. Joe Addison, Inc. (In re Brown), 210 B.R. 878, 881 (Bankr.
S.D. Ga. 1997). Such a creditor never had any duty not to dispose of the collateral as the
entire transaction occurred prepetition.
The evidence shows that Paxon repossessed the vehicle before Debtors filed their
second petition. Paxon did not violate the automatic stay by doing so and thus had no
duty to refrain from or prevent future disposition at this juncture. Therefore, Paxon
would not have a duty to refrain from cashing in on the seized collateral unless a debtor
filed a petition before disposition. Without this duty, the disposition is not actionable
under § 362(h).
The dispositive question, then, is when did Paxon dispose of the vehicle? In order
for Paxon to be under a duty not to dispose of the vehicle such that sanctions could be
imposed for doing so, two conditions must be present: 1. A petition must have been filed
before disposition; and 2. Paxon must have been on notice when vehicle was disposed of.
If Paxon disposed of the car post-petition, Paxon had a duty to stay or prevent disposition
of the vehicle, because the automatic stay had been violated. If Paxon knew of the
petition (and thus its duty to protect the new estate’s interest in the vehicle) when it
disposed of the car, then a duty arose to respect the stay. Therefore, Debtors bear the