The Eastern District of Pennsylvania (Bankruptcy) Has Decided that a University Violated the Automatic Stay by Failing to Provide Debtor with Copies of Her Transcript

For a long time, Debtors have been troubled by the scenario where they owe money to the institution from which they graduated but are unable to obtain their school records to support their job applications due to having a balance due and owing to the institution.  Whether it is a stay violation for an institution to engage in this quasi-collection action by withholding the transcript has never been very clear. 

On September 25, 2007, Judge Eric Frank ruled against the University of Pennsylvania and in favor of the Debtor, decreeing that the above-described conduct is in fact a violation of the Automatic Stay.  Also notable is the fact that Judge Frank rejected the University’s defense of good faith in the face of Debtor’s request for damages, ruling that in light of BAPCPA, the decision of the Third Circuit rendered in In Re Unversity Medical Center, 973 F.2d 1065 (3d Cir. 1992) is no longer authoritative. 

As such, the relief granted to the Debtor in this case was an injunction requiring the production of a certified copy of the Debtor’s transcript as well as an invitation to the Debtor to file a Petition to assess actual damages, costs and attorney fees.

Judge Frank was forced to sort through and distinguish conflicting case precedent in order to come to his decision.  The acute reasoning employed by Judge Frank is worth a read.