How My Client Won Rule 9011 Sanctions Against a Creditor in Bankruptcy Court
TL;DR
A creditor that files a defective bankruptcy paper and ignores warnings can be sanctioned under Rule 9011 of the Federal Rules of Bankruptcy Procedure and ordered to pay the other side’s attorney fees. In In re Heasley, 674 B.R. 475 (Bankr. E.D. Pa. 2025), the court imposed that sanction after my client’s creditor maintained an objectively unreasonable objection through the 21-day safe-harbor window.
When a creditor files a baseless or defective paper in a bankruptcy case, the court can make it pay. The tool is Rule 9011 sanctions, the bankruptcy version of the Rule 11 penalties familiar from federal civil litigation.
In In re Heasley, 674 B.R. 475 (Bankr. E.D. Pa. 2025), a creditor filed a procedurally improper objection to my client’s Chapter 7 discharge and ignored every warning about it. It withdrew the filing the day before the hearing. Too late. I had filed a sanctions motion for my client, and the court granted it, ordering the creditor to pay the attorney fees she incurred fighting the objection.
What Rule 9011 Sanctions Are
Rule 9011 of the Federal Rules of Bankruptcy Procedure is the bankruptcy counterpart to Rule 11, the federal rule against baseless filings. By presenting a document to the court, an attorney or party certifies that it has a proper purpose and that its legal contentions are warranted by existing law. The certification continues for as long as the party advocates the filing. A litigant who learns its position is defective has to correct or withdraw it.
A court does not need to find bad faith before it imposes Rule 9011 sanctions. In the Third Circuit, which covers Pennsylvania and New Jersey, the test is whether the conduct was objectively unreasonable. Sanctions must be limited to what deters repetition of the conduct, and they can include an order to pay the other side’s reasonable attorney fees and expenses.
The 21-Day Safe Harbor
The rule builds in a safe harbor. Before filing a sanctions motion, the moving party must serve it on the offender and wait 21 days. If the offender withdraws the challenged filing during that window, the motion never reaches the court.
The safe harbor gives a careless litigant a clean exit. A party that lets the window close, as the creditor in Heasley did, faces the motion in open court.
What Happened in the Heasley Case
My client filed Chapter 7 on May 27, 2025, and listed a $50,062.51 unsecured debt to We Care Legal Services, PLLC. We Care attended the meeting of creditors on August 21 and questioned her about her schedules. Three days later, it filed a “Motion Objection to Chapter 7 Discharge” citing 11 U.S.C. § 727(a)(4) and 11 U.S.C. § 727(a)(6).
That filing was defective from the caption down. Federal Rule of Bankruptcy Procedure 7001(d) requires a creditor to bring an objection to discharge as an adversary proceeding (a separate lawsuit inside the bankruptcy case that starts with a complaint), not as a motion. The court’s standard notice to creditors says so on its face: “You must file a complaint … if you assert that the debtor is not entitled to receive a discharge.” The motion also contained placeholder language in several spots and left one statutory reference blank.
I responded the next day with an objection on the docket. It flagged the procedural defect and announced that a sanctions motion would follow. The court entered my client’s discharge on August 28.
Two days after that, I served We Care with the Rule 9011 letter and a copy of the prospective sanctions motion. We Care did nothing. When the 21-day window closed, I filed the motion and asked the court to hear it on an expedited basis alongside We Care’s objection. I filed witness and exhibit lists ahead of the evidentiary hearing, as the court’s procedures require. We Care stayed silent until the day before the hearing, when it withdrew its objection.
Why the Court Imposed Rule 9011 Sanctions
Judge Derek J. Baker took up three arguments at the evidentiary hearing, where I presented my client’s testimony.
The court declined to sanction We Care for its questioning at the meeting of creditors. Creditors may examine a debtor there under § 343 of the Bankruptcy Code, and neither the trustee nor debtor’s counsel had cut the questions off. The court also declined to sanction the decision to object on the merits. Long odds are not the test; a claim has to lack any warrant in law or evidence before it becomes sanctionable.
The procedural argument carried the day. The court found that filing the defective motion and then maintaining it in the face of plain warnings was objectively unreasonable. We Care had the court’s own notice telling it to file a complaint. The next day it had my docket objection. Then came my letter and the draft sanctions motion. We Care responded to none of it. It withdrew the objection 22 hours before the hearing, after we had already done the work of preparing to litigate. As the court put it, a creditor is not free to file slapdash, improper motions and then disappear while the debtor squirms.
The sanction: We Care must pay the reasonable attorney fees and expenses my client incurred addressing the objection. The court noted that she is an individual with five dependent children and a negative monthly income. The cost of We Care’s prolonged inaction, the court said, should not fall on her.
The Stay Violation Claim: A Win on Liability, a Lesson on Damages
The motion raised a second issue. After the bankruptcy filing, We Care sent my client six automated collection emails between June and August. The automatic stay (the court order that pauses collections the moment a case is filed) barred each one, and the court found the violations willful. Automation is no defense; a creditor that knows about the bankruptcy and intends to send the message violates the stay willfully.
The court still awarded nothing on this claim. Section 362(k) of the Bankruptcy Code requires proof of actual damages, and the record contained none. My client testified that the emails caused dread and stress, but there were no medical records or corroborating witnesses, and no evidence of lost wages or other out-of-pocket costs.
Compare that result with In re Minarik, another case I litigated in the same court. There, the debtor’s testimony about fearing for a medically fragile child supported a $20,000 emotional-distress award. The difference was the evidence of harm. If a creditor contacts you after you file, save every message and tell your attorney at once, while you can still document the harm. The stay reaches every form of collection on a pre-bankruptcy debt, including wage garnishment and bank levies.
A Note for Pennsylvania and New Jersey Debtors
Heasley is a published decision from the Eastern District of Pennsylvania, the bankruptcy court serving Philadelphia and the surrounding counties. Its analysis follows Third Circuit precedent, so the same objective-unreasonableness standard governs Rule 9011 sanctions in New Jersey. Debtors on either side of the river can expect courts to take a hard look at creditors who file defective papers and then go quiet.
When a Sanctions Motion Makes Sense for a Debtor
Not every creditor mistake supports sanctions. Heasley itself shows the line: aggressive questioning and a weak legal theory were not sanctionable, but pressing a plainly defective filing after repeated warnings was.
If a creditor files something improper in your case, save everything and move fast. My response in Heasley hit the docket the day after We Care filed its objection. Each early step built the record that later supported the award, and the safe-harbor letter put the creditor on notice it could not later deny.
If you have not filed yet and a creditor is already threatening litigation, you can share the details before your call so the consultation starts from the facts.
Talk to the Bankruptcy Attorney Who Won Rule 9011 Sanctions in In re Heasley
The Law Office of Mike Assad represents individuals and small business owners across New Jersey and Pennsylvania. Mike handled In re Heasley from the first docket objection through the evidentiary hearing. He is admitted in both states and has represented debtors in the U.S. Bankruptcy Court for the District of New Jersey and the Eastern, Middle, and Western Districts of Pennsylvania.
Working with the firm looks like this:
- A free, confidential consultation, with flat fees where possible and payment plans available.
- Fully virtual representation by phone and Zoom, wherever you are in PA or NJ.
- The same attorney from the first call through filing and beyond.
- A live person when you call.
Call (609) 808-3300 or book your free consultation online. The firm has offices in Cherry Hill, New Jersey and Philadelphia, Pennsylvania.
Frequently Asked Questions
Rule 9011 of the Federal Rules of Bankruptcy Procedure requires that every filing have a proper purpose and a basis in law and fact. When a party violates the rule, the court may impose sanctions designed to deter repetition of the conduct, including an order to pay the other side’s reasonable attorney fees and expenses.
Yes. In In re Heasley, the court imposed Rule 9011 sanctions on a creditor that filed and maintained a procedurally improper objection to the debtor’s discharge. The court did not need to find bad faith; objectively unreasonable conduct was enough.
Before filing a sanctions motion, the moving party serves it on the offending party, which then has 21 days to withdraw the challenged filing without penalty. If it does not, the moving party can file the motion and the court may impose sanctions designed to deter the conduct.
Yes, when fee-shifting is what it takes to deter the conduct. In Heasley, the court ordered the creditor to pay the reasonable attorney fees and expenses the debtor incurred responding to its improper filing. Every case turns on its facts, and no attorney can promise a result in advance.
Collection emails about a pre-bankruptcy debt violate the automatic stay, and automated sends still count as willful violations. Recovery under § 362(k) requires proof of actual damages, though. In Heasley, the court found six willful violations but awarded nothing because the record contained no proof of damages. In In re Minarik, documented emotional distress supported a $20,000 award.
Mike Assad
Founding attorney, admitted in Pennsylvania and New Jersey. Mike has guided individuals and businesses through bankruptcy across Pennsylvania and New Jersey.