## Facts

- William Duke filed a Chapter 7 bankruptcy petition on September 23, 1994, listing Sears, Roebuck & Co. as a creditor.
- The filing triggered the automatic stay under 11 U.S.C. § 362(a), and Sears had notice of the stay.
- Sears sent a letter to Duke’s bankruptcy counsel stating the account balance ($317.10) and offering reinstated charge privileges (a $500 credit line) if Duke chose to reaffirm the debt and pay it under a reaffirmation agreement.
- Sears enclosed proposed reaffirmation agreements with the letter.
- Sears copied Duke directly on the correspondence, marked as being for “information purposes only.”
- Duke contended the letter was an act to collect a prepetition debt barred by § 362(a)(6) and that copying him directly was independently improper.
- The bankruptcy court ruled for Sears, and the district court affirmed.

## Issues

1. Whether a creditor violates 11 U.S.C. § 362(a)(6) by sending a noncoercive letter to the debtor’s attorney, copied to the debtor, offering reaffirmation of a prepetition debt in exchange for renewed credit.
2. Whether the Bankruptcy Code requires a creditor, as a matter of law, to refrain from copying the debtor on reaffirmation-related correspondence sent to the debtor’s counsel.

## Decision

- The Seventh Circuit affirmed the district court’s judgment (which had affirmed the bankruptcy court).
- The court held Sears’s letter was not an “act to collect, assess, or recover” a prepetition claim within the meaning of § 362(a)(6).
- The court held the Bankruptcy Code does not, as a matter of law, forbid a creditor from copying the debtor on correspondence to the debtor’s attorney concerning reaffirmation.

## Legal Principles

- Section 362(a)(6) prohibits creditor acts to collect, assess, or recover prepetition claims, but it does not prohibit all communications with a debtor during bankruptcy.
- Section 524(c) permits reaffirmation agreements under specified conditions; communications proposing reaffirmation may be consistent with the Code when noncoercive and structured as an offer rather than a demand.
- A reaffirmation offer that lacks threats, demands for immediate payment, or harassing tactics is less likely to be treated as prohibited collection activity under § 362(a)(6).
- Copying the debtor on a letter addressed to the debtor’s counsel is not, by itself, a stay violation; the inquiry focuses on whether the communication functions as coercive debt collection.

## Conclusion

The court held that Sears’s nonthreatening reaffirmation proposal, sent to Duke’s attorney and copied to Duke for informational purposes, fell within communications contemplated by the Code’s reaffirmation framework and did not violate the Chapter 7 automatic stay.


In re Duke, 79 F.3d 43 (7th Cir. 1996)