Dawson

The main question in this case is whether a debtor may recover damages for emotional distress under 11 U.S.C. § 362 (h) when a creditor violates the automatic stay that follows from the filing of a bankruptcy petition. In a previous opinion, Dawson v. Washington Mutual Bank, F.A., 367 F.3d 1174 (9th Cir.), withdrawn, 385 F.3d 1194 (9th Cir.2004), we answered that question “no.” Upon reconsideration, however, we are persuaded that we erred and now answer “yes.”

FACTUAL AND PROCEDURAL' BACKGROUND

Plaintiffs George and Barbara Dawson bought a home located at 3490 Ridgewood Way, in Richmond, California (“the Property”). When they acquired the Property in 1987, they obtained from the predecessor of Defendant Washington Mutual Bank (“the Bank”) a loan secured by a first deed of trust. In 1989, Plaintiffs executed a second deed of trust, to secure an obligation of $40,000, in favor of the Dixons, who were friends of Plaintiffs.

Beginning in 1993, Plaintiffs experienced difficulty in making their monthly mortgage payments to the Bank. On May 18, 1993, Plaintiffs filed a Chapter 13 bankruptcy petition and, in October of the same year, the Chapter 13 plan was confirmed.

Plaintiffs again…