The automatic stay in bankruptcy does not apply to actions brought by the debtor, allowing defendants to litigate their defenses without court permission.
The plaintiff, a former bankrupt, sued defendants for allegedly violating the automatic stay by moving to dismiss his state court action. The court addresses whether the automatic stay protects a debtor's affirmative litigation. Applying the statutory text and legislative history, the court holds that the stay applies only to actions against the debtor or seizures of estate property, not to defenses raised by defendants in suits brought by the debtor. The court affirms the dismissal of the stay claim and the fraud count, finding the fraud claim time-barred and the stay inapplicable.
At page 577 Automatic stay in suits brought by bankrupt debtor76 citing cases[T]he automatic stay is inapplicable to suits by the . . . [debtor] . . . [t]here is . . . no policy of preventing persons whom the bankrupt has sued from protecting their legal rights.
- Lanasa v. Stiene, No. 1:22-cv-05686 (E.D.N.Y. July 21, 2023).([T]he automatic stay is inapplicable to suits by the . . . [debtor] . . . [t]here is . . . no policy of preventing persons whom the bankrupt has sued from protecting their legal rights.)
- Washington Mut., Inc. v. FDIC, 659 F. Supp. 2d 152 (D.D.C. 2009).published(True, the bankrupt's cause of action is an asset of the estate; but as the defendant in the bankrupt's suit is not, by opposing that suit, seeking to take possession of it, [the automatic stay does not apply].)
- Washington Mut., Inc. v. Fed. Deposit Ins. Corp., 659 F. Supp. 2d 152 (D.D.C. 2009).published (True, the bankrupt’s cause of action is an asset of the estate; but as the defendant in the bankrupt’s suit is not, by opposing that suit, seeking to take possession of it, [the automatic stay does not apply].)
- Checkers Drive-In Restaurants, Inc. v. Comm'r of Patents & Trademarks, 51 F.3d 1078 (D.C. Cir. 1995).published (There is ... no policy of preventing persons whom the bankrupt has sued from protecting their legal rights.)
- Richardson v. Trs. of Indiana Univ. (In re Richardson), 497 B.R. 546 (Bankr. S.D. Ind. 2013).published“the fundamental purpose of bankruptcy, from the creditors' standpoint, is to prevent creditors from trying to steal a march on each other ... and the automatic stay is essential to accomplishing this purpose.”
- Cumulus Media New Holdings Inc. v. Nielsen Co. (US), 182 F.4th 108 (2d Cir. 2026).publishedCf. Martin- Trigona v. Champion Fed. Sav. & Loan Ass’n, 892 F.2d 575, 577 (7th Cir. 1989) (Posner, J.) (“The fundamental purpose of bankruptcy, from the creditors’ standpoint, is to prevent creditors from trying to steal a march on each ot…
- Heartwise, No. 2:13-cv-00982 (D. Utah Apr. 6, 2026).(stating that there is “no policy of preventing persons whom the bankrupt has sued from protecting their legal rights.)
- Spac Recovery Co., No. 25-12109 (Bankr. S.D.N.Y. Feb. 6, 2026).publishedSee 11 U.S.C. § 362 (a); see also 4Kids Entertainment, Inc. v. Upper Deck Co., 797 F.Supp.2d 236, 241 (S.D.N.Y. 2011) (“The automatic stay does not extend to claims brought by the debtors against other parties.”); In re Financial News Netw…
- New London v. Speer, 322 A.3d 407 (Conn. App. Ct. 2024).published(�‘[s]ection 1334 (a) of the Judicial Code vests original and exclusive jurisdiction over cases arising under [t]itle 11 (the Bankruptcy Code) in the federal district courts, and a case under [11 U.S. C. § 362 (k)] is su…)
- In re James A. & Elizabeth C. Zachman, No. 8:22-cv-00890 (C.D. Cal. Jan. 12, 2023).Sav. & Loan Ass’n, 892 F.2d 575, 577 (7th Cir. 1989)).
Show 63 more citing cases
- Del Rosario v. Yakte Props., LLC, No. 2:21-cv-01304 (E.D. Cal. Sept. 28, 2022).Sav. & 28 Loan Ass’n, 892 F.2d 575, 577 (7th Cir. 1989)). 1 For the reasons set forth above, 2 1.
- Nelson v. Kunkle, No. 8:19-cv-00329, 2020 WL 1323899 (D. Neb. Mar. 20, 2020).Minn. Mar. 31, 2010) (“[T]he stay applies only to proceedings “against the debtor.”) (quoting Martin–Trigona v. Champion Fed. Sav. & Loan Ass’n, 892 F.2d 575, 577 (7th Cir. 1989); Picco, 900 F.2d at 850 (“The automatic stay of the bankrupt…
- In re Paul R. Koch, No. 7:19-cv-02830 (S.D.N.Y. Mar. 18, 2020).Sav. & Loan Ass’n, 892 F.2d 575, 577 (7" Cir. 1989) (“[T]he automatic stay is inapplicable to suits by the bankrupt. . . .
- Hegedus v. Nationstar Mortg. LLC, No. 5:17-cv-00053, 2020 WL 957464 (W.D. Va. Feb. 27, 2020).([I]he automatic stay is inapplicable to suits by the bankrupt{.})
- Stacey Renae Hammer v. Lea C. Noelke, No. 13-17-00223-CV (Tex. App.—Corpus Christi Nov. 29, 2018).published Sav. & Loan Ass’n, 892 F.2d 575, 577 (7th Cir. 1989)); accord In re Bryner, 425 B.R. 601, 606 (B.A.P. 10th Cir. 2010).
- In re Tia Danielle Smith, No. CC-16-1414-FLKu (B.A.P. 9th Cir. Feb. 1, 2018).unpublishedSav. & Loan Ass’n, 892 F.2d 575, 577 (7th Cir. 1989)).
- Rentas v. Serrano (In re Garcia), 553 B.R. 1 (Bankr. D.P.R. 2016).publishedSav. & Loan Ass’n., 892 F.2d 575, 577 (7th Cir. 1989).
- Gonzalez v. Ocwen Home Loan Servicing, 74 F. Supp. 3d 504 (D. Conn. 2015).published(recognizing that "[t]he Second and Third Circuits have held the automatic stay applicable only to actions against the bankrupt or to seizures of property of the bankrupt)
- Picard v. Fairfield Greenwich Ltd., 762 F.3d 199 (2d Cir. 2014).publishedSav. & Loan Ass’n, 892 F.2d 575, 577 (7th Cir.1989).
- Gecy v. Bank of the Ozarks (In re Gecy), 510 B.R. 510 (Bankr. D.S.C. 2014).publishedSav. & Loan Ass’n, 892 F.2d 575, 577 (7th Cir.1989); see also Parker v. Bain, 68 F.3d 1131, 1138 (9th Cir.1995) (holding a claim originally brought by a person who subsequently filed bankruptcy under chapter 11 was not subject to the autom…
- Mason v. Costello (In re Klarchek), 508 B.R. 386 (Bankr. N.D. Ill. 2014).published (claim by the debtors against others is not stayed)
- Houey v. Carolina First Bank, 890 F. Supp. 2d 611 (W.D.N.C. 2012).publishedMartin-Trigona v. Champion Federal Sav. and Loan Association, 892 F.2d 575, 577 (7th Cir.1989) (internal quotations and citations omitted) (emphasis in original).
- Disciplinary Bd. of the Supreme Court v. Feingold (In re Feingold), 474 B.R. 293 (S.D. Fla. 2012).publishedSav. & Loan Ass’n, 892 F.2d 575, 577 (7th Cir. 1989).” In re Diaz, 647 F.3d 1073, 1085 (11th Cir.2011).
- Florida Dept. of Revenue v. Diaz, 647 F.3d 1073 (11th Cir. 2011).publishedSav. & Loan Ass’n, 892 F.2d 575, 577 (7th Cir.1989).
- Gonzales v. Beery (In Re Beery), 452 B.R. 825 (Bankr. D.N.M. 2011).publishedMartin-Trigona v. Champion Federal Savings and Loan Asso., 892 F.2d 575, 577 (7th Cir.1989); In re Sky Group International, Inc., 108 B.R. 86, 89 (Bankr.W.D.Pa.1989).
- Patterson v. Homecomings Fin. LLC, 425 B.R. 499 (E.D. Wis. 2010).publishedSav. & Loan Ass’n, 892 F.2d 575, 577 (7th Cir.1989) (“Section 1334(a) of the Judicial Code vests original and exclusive jurisdiction over cases arising under Title 11 (the Bankruptcy Code) in the federal district courts, and a case under s…
- Bryner v. LeBaron (In Re Bryner), 425 B.R. 601 (B.A.P. 10th Cir. 2010).published Id. at 704 (quoting Martin-Trigona, 892 F.2d at 577) (citation omitted). 38 .
- M.D. Kenneth A. Thomas v. Blue Cross, 333 F. App'x 414 (11th Cir. 2009).unpublishedIt would not make sense under a plain reading of the statute to treat raising a defense against a non-stayed counterclaim as an “exercise of control over property.” See Martin-Trigona, 892 F.2d at 577 (“True, the bankrupt’s cause of action…
- In re Minter-Higgins, 366 B.R. 880 (Bankr. N.D. Ind. 2007).publishedIn re Rimsat, Ltd., 98 F.3d 956, 961 (7th Cir.1996); Martin-Trigona v. Champion Federal Savings & Loan Ass’n, 892 F.2d 575, 577 (7th Cir.1989); Maritime Electric Co. v. United Jersey Bank, supra, 959 F.2d at 1204.
- Acands, Inc. v. Travelers Cas. & Sur. Co., 435 F.3d 252 (3d Cir. 2006).publishedSav. & Loan Ass’n., 892 F.2d 575, 577 (7th Cir. 1989).
- Acands Inc v. Travelers Cslty, No. 04-3926 (3d Cir. Jan. 19, 2006).publishedSav. & Loan Ass’n., 892 F.2d 575, 577 (7th Cir. 1989).
- In re Mid-City Parking, Inc., 332 B.R. 798 (Bankr. N.D. Ill. 2005).published As the Indiana Supreme Court stated, “Dismissing [the] appeal does nothing to further ‘the policy behind the [Bankruptcy Code], which is to protect the bankrupt’s estate from being eaten away by creditor’s lawsuits and seizures of property…
- González Santiago v. González Caruso, 10 T.C.A. 1000 (2005).publishedCroix Hotel Corp, supra; refiriendo, además, a In re: Barry Estates, 812 F. 2d. 67, 71 (2nd Cir.) cert. denied, 484 U.S. 819 (1987); Martin-Trigona v. Champion Fed. Sav. & Loan Assoc., 892 F. 2d. 575, 577 (7th Cir. 1989).
- William J. Crosby v. Monroe Cnty., 394 F.3d 1328 (11th Cir. 2004).published(the automatic stay is inapplicable to suits by the debtor)
- Heghmann v. Town of Rye, 326 F. Supp. 2d 227 (D.N.H. 2004).published(suggesting, but not deciding, that a suit to enforce one’s rights under § 362(h) should have been brought in the bankruptcy court)
- Glover v. Premierbank, 59 F. App'x 850 (7th Cir. 2003).unpublishedSav. & Loan Ass’n, 892 F.2d 575, 577 (7th Cir.1989); cf. Walker v. Thompson, 288 F.3d 1005,1010 (7th Cir.2002).
- In re William L. Hall, Debtor-Appellee. Appeal Of: Enodis Corp., 304 F.3d 743 (7th Cir. 2002).published Sav. & Loan & Ass’n, 892 F.2d 575, 577 (7th Cir. 1989).
- Swanson v. Indiana, 23 F. App'x 590 (7th Cir. 2001).unpublishedSav. & Loan Ass’n, 892 F.2d 575, 577 (7th Cir.1989).
- Shin v. Shin, 27 P.3d 398 (Haw. App. 2001).publishedSav. & Loan Ass’n, 892 F.2d 575, 577 (7th Cir.1989): The fundamental purpose of bankruptcy ... is to prevent creditors from stealing a march on each other ... and the automatic stay is essential to accomplishing this purpose.
- Laura Anne Aiello v. Providian Fin. Corp., 239 F.3d 876 (7th Cir. 2001).published In re Rimsat, Ltd, 98 F.3d 956, 961 (7th Cir. 1996); Martin-Trigona v. Champion Federal Savings & Loan Ass’n, 892 F.2d 575, 577 (7th Cir. 1989); Maritime Electric Co. v. United Jersey Bank, supra, 959 F.2d at 1204 .
- Halas v. Platek, 239 B.R. 784 (N.D. Ill. 1999).published“Section 1334(a) ... vests original and exclusive jurisdiction over cases aris ing under Title 11 ... in the federal district courts, and a case under section § 362(h) is such a case”
- Worth v. Tamarack Am., 47 F. Supp. 2d 1087 (S.D. Ind. 1999).published(For in any event the automatic stay is inapplicable to suits by the bankrupt ('debtor,' as he is now called.”))
- In re Halas, 226 B.R. 618 (Bankr. N.D. Ill. 1998).published“[s]ection 1334(a) of the Judicial Code vests original and exclusive jurisdiction over cases arising under Title 11 (the Bankruptcy Code) in the federal district courts, and a case under section 362(h) is such a case”
- Wills v. Heritage Bank (In Re Wills), 226 B.R. 369 (Bankr. E.D. Va. 1998).publishedMartin-Trigona v. Champion Fed. Sav. & Loan Ass’n, 892 F.2d 575, 577-78 (7th Cir.1989); Koffman v. Osteoimplant Tech., Inc., 182 B.R. 115, 124 (D.Md.1995); but see Michaels v. National Bank of Sussex County (In re E-Tron Corp.), 141 B.R. 4…
- In re Stinson, 221 B.R. 726 (Bankr. E.D. Mich. 1998).publishedSav. & Loan Ass’n, 892 F.2d 575, 577 (7th Cir.1989).
- Krystal Cadillac Oldsmobile GMC Truck, Inc. v. Gen. Motors Corp. (In Re Krystal Cadillac Oldsmobile GMC Truck, Inc.), 142 F.3d 631 (3d Cir. 1998).Savings & Loan Ass’n, 892 F.2d 575, 577 (7th Cir.1989)).
- Richard Borman & Joanne Borman, His Wife, Joanne Borman, of the Last Will of Richard Borman v. Raymark Indus., Inc., Keene Corp., Eagle-Picher Indus., Inc., Owens-Corning Fiberglas Corp., Owens-Illinois Glass Co., Celotex Corp., Fibreboard Corp., Gaf Corp., Turner-Newall, PLC, Garlock, Inc. v. Nicolet, Inc. Celotex Corp., 946 F.2d 1031 (3d Cir. 1991).published
- Mar. Elec. Co., Inc., a New York Corp. v. United Jersey Bank, a New Jersey Banking Corp. Michael Gill & Mar. Elec. Co., Inc., a New Jersey Corp.. Michael Gill, Third-Party v. Mar. Elec. Co., Inc., a New York Corp. Thomas Gill, Individually & in His Capacity as President of Mar. Elec. Co., Inc., (n.y.), Third-Party Mar. Elec. Co., Inc., (Plaintiff & Third-Party Defendant) & Thomas Gill (Third-Party Defendant), 959 F.2d 1194 (3d Cir. 1992).published
- Bankr. L. Rep. P 75,285 in Re Mark Nelson v. Linda Wihbey Taglienti, 994 F.2d 42 (1st Cir. 1993).published
- Eugene W. Alpern v. Phillip S. Lieb, 11 F.3d 689 (7th Cir. 1993).published
- In the Matter Of: Rimsat, Ltd., Debtor. Paul E. Underwood, Tr. v. Carl B. Hilliard, Jr., 98 F.3d 956 (7th Cir. 1996).published
- Hartford Leasing Corp. v. State, 888 P.2d 694 (Utah Ct. App. 1994).published
- Krystal Cadillac, Oldsmobile, GMC Truck, Inc. v. Gen. Motors Corp. (In Re Krystal Cadillac, Oldsmobile, GMC Truck, Inc.), 205 B.R. 44 (M.D. Pa. 1997).published
- United States v. Fingers (In Re Fingers), 170 B.R. 419 (S.D. Cal. 1994).published
- White v. City of Santee (In Re White), 186 B.R. 700 (B.A.P. 9th Cir. 1995).published
- Martino v. First Nat'l Bank of Harvey (In Re Garofalo's Finer Foods, Inc.), 186 B.R. 414 (N.D. Ill. 1995).published
- Justus v. Fin. News Network Inc. (In Re Fin. News Network Inc.), 158 B.R. 570 (S.D.N.Y. 1993).published
- Gordon v. Whitmore (In Re Merrick), 175 B.R. 333 (B.A.P. 9th Cir. 1994).published
- In re Capgro Leasing Assocs., 169 B.R. 305 (Bankr. E.D.N.Y. 1994).published
- Yorke v. Citibank, N.A. (In Re BNT Terminals, Inc.), 125 B.R. 963 (Bankr. N.D. Ill. 1991).published
- In re United States Abatement Corp., 157 B.R. 278 (E.D. La. 1993).published
- Mid Kansas Fed. Sav. & Loan Ass'n of Wichita ex rel. Receiver Resolution Trust Corp. v. Orpheum Theater Co., 151 B.R. 560 (D. Kan. 1993).published
- Kemper Ins. v. Profile Sys., Inc. (In Re Profile Sys., Inc.), 193 B.R. 507 (Bankr. D. Minn. 1996).published
- Northwood Flavors Co. v. Dollar Bank (In Re Northwood Flavors, Inc.), 202 B.R. 63 (Bankr. W.D. Pa. 1996).published
- Formisano v. Nat'l Cmty. Bank (In Re Formisano), 148 B.R. 217 (Bankr. D.N.J. 1992).published
- Schieffler v. Pulaski Bank & Trust Co. (In Re Molitor), 183 B.R. 547 (Bankr. E.D. Ark. 1995).published
- Carpenter v. Farm Credit Servs. of Mid-Am., 654 N.E.2d 1125 (Ind. 1995).published
- Miklaski v. United States, 18 F. Supp. 2d 707 (E.D. Mich. 1997).published
- United States v. Inslaw, Inc., 932 F.2d 1467 (D.C. Cir. 1991).published
- Brown v. Armstrong, 949 F.2d 1007 (8th Cir. 1991).published
- Mar. Elec. Co. v. United Jersey Bank, 959 F.2d 1194 (3d Cir. 1991).published
- Victor Foods, Inc. v. Crossroads Econ. Dev. of St. Charles Cnty., Inc., 977 F.2d 1224 (8th Cir. 1992).published
- Rahul Dev Manchanda, No. 23-22095 (Bankr. S.D.N.Y. May 12, 2025).
At page 578 Relinquishing jurisdiction over pendent state-law claims14 citing cases“if it is absolutely clear that the pendent claims can be decided in only one way, the district judge can and should decide them, to save the time of the state court.”
- Golden Years Homestead, Inc. v. Buckland, 466 F. Supp. 2d 1059 (S.D. Ind. 2006).publishedSav. & Loan Ass’n, 892 F.2d 575, 578 (7th Cir.1989).
- Miller Aviation v. Milwaukee Cnty. Bd. of Supervisors, 273 F.3d 722 (7th Cir. 2001).publishedSav. & Loan Ass’n, 892 F.2d 575, 578 (7th Cir.1989).
- Anabel McCutcheon v. New York Stock Exch. Arbitration Comm'n, 937 F.2d 610 (7th Cir. 1991).unpublished
- Lydia Korzen v. Local Union 705, 75 F.3d 285 (7th Cir. 1996).published
- Fujisawa Pharm. Co. v. Kapoor, 936 F. Supp. 455 (N.D. Ill. 1996).published
- New Line Int'l Releasing, Inc. v. Ivex Films, S.A., 140 B.R. 342 (S.D.N.Y. 1992).published
- R.E. Davis Chem. Corp. v. Nalco Chem. Co., 757 F. Supp. 1499 (N.D. Ill. 1990).published
- Merchants & Farmers Bank of Dumas, Ark. v. Hill, 122 B.R. 539 (E.D. Ark. 1990).published
- Tregenza v. Great Am. Commc'ns Co., 823 F. Supp. 1409 (N.D. Ill. 1993).published
- Wright v. Associated Ins. Companies Inc., 29 F.3d 1244 (7th Cir. 1994).published
Show 3 more citing cases
- Tarani A. Johnson, No. 26-10372 (Bankr. E.D. Pa. May 29, 2026).
- Bowman v. City of Franklin, 980 F.2d 1104 (7th Cir. 1992).published
- Watson v. Indiana Dep't of Corr., No. 1:18-cv-02791 (S.D. Ind. Sept. 30, 2020).
v.
CHAMPION FEDERAL SAVINGS AND LOAN ASSOCIATION, formerly known as Bloomington Federal Savings and Loan Association, and Schiff, Hardin and Waite
This is a suit to redress alleged wrongdoing in the course of the plaintiff’s bankruptcy some years ago. The plaintiff had sued defendant Champion in an Illinois state court; the nature of the suit is unimportant. While the suit was pending, the plaintiff was petitioned into bankruptcy. Champion, represented by the defendant law firm, moved to dismiss the plaintiff’s complaint in the Illinois litigation. After procedural tergiversations unnecessary to[*577] recount, the suit was dismissed. The plaintiff’s appeal from the dismissal was itself later dismissed for failure to prosecute. Before that appeal was filed, the trustee in bankruptcy had abandoned the interest of the bankrupt estate in the litigation.
All this was in 1981 and 1982. The present suit was filed in 1988. The complaint, which seeks damages, is in three counts. The first charges that the defendants violated the automatic stay in bankruptcy (to oversimplify, the filing of the petition in bankruptcy automatically stays all suits against the bankrupt, 11 U.S.C. § 362) by moving to dismiss the plaintiffs Illinois state court action. The second charges that the tactics which the defendants employed in procuring that dismissal violated due process of law. The third challenges those tactics as common law fraud. The district court dismissed the suit on the defendants’ motion for summary judgment.
The second count is frivolous because it fails to allege state action by the defendants, both of which are private entities. The third is frivolous also, being plainly barred by the relevant statute of limitations, which is five years. Ill.Rev. Stat. ch. 110, 1113-205. The first count, however, presents more complicated issues. One is jurisdictional: whether a violation of the automatic stay creates a right of action. The only decision on the point, Pettitt v. Baker, 876 F.2d 456 (5th Cir.1989), holds that it does, relying on the following amendment made in 1984 to the automatic-stay provision: “An individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys’ fees, and, in appropriate circumstances, may recover punitive damages.” 11 U.S.C. § 362(h). Section 1334(a) of the Judicial Code vests original and exclusive jurisdiction over cases arising under Title 11 (the Bankruptcy Code) in the federal district courts, and a case under section 362(h) is such a case. So, without more, it would be clear that a suit to enforce one’s rights under section 362(h) could be brought in district court before a district judge, as Martin-Trigona has done. But there is more. Section 157 of the Judicial Code establishes procedures in the district court for “any or all cases under title 11,” and those procedures signally include reference to a bankruptcy judge, which was not done here. It was not done in Pettitt either, and the court left open the question of the proper tribunal.
Here no more than in Pettitt need we decide whether the case should have been referred to a bankruptcy judge. For in any event the automatic stay is inapplicable to suits by the bankrupt (“debtor,” as he is now called). This appears from the statutory language, which refers to actions “against the debtor,” 11 U.S.C. § 362(a)(1), and to acts to obtain possession of or exercise control over “property of the estate,” § 362(a)(3), and from the policy behind the statute, which is to protect the bankrupt’s estate from being eaten away by creditors’ lawsuits and seizures of property before the trustee has had a chance to marshal the estate’s assets and distribute them equitably among the creditors. H.R.Rep. No. 595, 95th Cong., 1st Sess. 340 (1977), U.S. Code Cong. & Admin.News 1978, p. 5787. The fundamental purpose of bankruptcy, from the creditors’ standpoint, is to prevent creditors from trying to steal a march on each other, In re Holtkamp, 669 F.2d 505, 508 (7th Cir.1982), and the automatic stay is essential to accomplishing this purpose. There is, in contrast, no policy of preventing persons whom the bankrupt has sued from protecting their legal rights. True, the bankrupt’s cause of action is an asset of the estate; but as the defendant in the bankrupt’s suit is not, by opposing that suit, seeking to take possession of it, subsection (a)(3) is no more applicable than (a)(1) is.
The Second and Third Circuits have held the automatic stay applicable only to actions against the bankrupt or to seizures of property of the bankrupt. In re Berry Estates, Inc., 812 F.2d 67, 71 (2d Cir.1987); Association of St. Croix Condominium Owners v. St. Croix Hotel Corp., 682 F.2d 446, 448 (3d Cir.1982). A slew of bankruptcy-court decisions concur. There is one outlier, In re Critical Fork Coal [*578] Co., 18 B.R. 422, 424 (Bankr.W.D.Va.1982), though it is not strictly an automatic-stay case. It holds that costs incurred by the bankrupt in a lawsuit that he prosecutes after entering bankruptcy are post-petition debt and hence require the permission of the bankruptcy court to incur, 11 U.S.C. § 364; from which the court concluded that there can be no proceedings in the case — it must in other words be stayed — without judicial authorization. We disagree with this chain of reasoning at various points but need mention only one. When as in the usual case the bankrupt is represented by a lawyer under a contract implicit or explicit — a contract executory as to the future course of the suit — it is up to the bankruptcy trustee to decide whether to accept the contract. 11 U.S.C. § 365. This is an aspect of the trustee’s stepping into the bankrupt’s shoes. It has nothing to do with whether the defendant in the bankrupt’s suit may continue litigating his defenses without leave of the bankruptcy court.
Analysis is complicated here by the fact that Martin-Trigona had no lawyer in the Illinois state court action after he went into bankruptcy. Conceivably he depleted assets belonging to the estate in opposing the defendants’ motion to dismiss. But that is a matter between him and the trustee, whose property the suit became when Martin-Trigona went bankrupt and a trustee was appointed. As for the interim between the bankruptcy and the appointment — an interval during which Martin-Trigona might have been wasting the assets of the bankrupt estate in responding to efforts by the defendants to get the case dismissed— it is too trivial a concern to defeat the rights of defendants to defend themselves.
So much for the merits; but a procedural issue remains to be considered. The general rule is that when the federal claims are dismissed before trial, the district court should relinquish jurisdiction over any pendent state-law claim rather than resolve it on the merits. United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966). Judge Moran did not do this, but instead dismissed Martin-Trigona’s count for com-mon law fraud on the merits. In the circumstances, this action was not an abuse of discretion. There are many exceptions to the general rule, Spartech Corp. v. Opper, 890 F.2d 949, 952 (7th Cir.1989), of which the one applicable here is that if it is absolutely clear that the pendent claim can be decided in only one way, the district judge can and should decide it, to save the time of the state court. Mechmet v. Four Seasons Hotels, Ltd., 825 F.2d 1173, 1178 (7th Cir.1987). Hence if the pendent claim is frivolous the judge can dismiss it with prejudice — and should do so, in order to protect the defendant from being harassed in state court by frivolous filings. Compare Medtronic, Inc. v. Intermedics, Inc., 725 F.2d 440, 442 (7th Cir.1984). Such a dismissal is not an invasion of state prerogatives, for if correct a judgment of frivolousness identifies an issue that a state court would have no interest in being permitted to decide for itself.
Affirmed.