Supreme Court to Review Goldman Sachs Dispute Over Bankruptcy Arbitration

The U.S. Supreme Court announced that it will hear a petition for review filed by Goldman Sachs Bank. The case centers on whether and when a bankruptcy court can refuse to honor an agreement to arbitrate disputes under the Federal Arbitration Act.

The underlying dispute began when Rhea Brown and Gregory Maze filed for bankruptcy. Both listed credit card debts with Goldman Sachs Bank. According to Maze and Brown, the bank repeatedly continued to try to seek payment of their credit card debts despite the Bankruptcy Code’s automatic stay, which bars creditors from attempting to collect debts from someone who has filed for bankruptcy. The debtors filed a separate lawsuit within their bankruptcy case, contending the bank willfully violated the automatic stay.

Lower Courts Block Arbitration Request

Goldman Sachs asked the bankruptcy court to put the adversary proceeding on hold and require Brown and Maze to arbitrate their dispute, pointing to an arbitration clause in their credit card agreements. The bankruptcy court denied that request. Both the federal district court and the U.S. Court of Appeals for the 4th Circuit upheld that ruling. A divided three-judge panel of the 4th Circuit concluded that requiring arbitration would interfere and conflict with the policies and purposes of the Bankruptcy Code.

Goldman Sachs petitioned the Supreme Court for review, arguing that the 4th Circuit’s ruling conflicted with a decision by the U.S. Court of Appeals for the 2nd Circuit. The bank stated that the practical stakes are enormous because of the ubiquity of arbitration clauses in consumer credit agreements, and that the appellate decision imperils the enforceability of those agreements.

What This Means for Readers

The Supreme Court’s decision to weigh in affects the balance between federal bankruptcy protections and private arbitration agreements found in many consumer contracts. Ordinary people involved in bankruptcy proceedings who face collection actions or arbitration demands from creditors should monitor how the justices handle the intersection of the automatic stay and the Federal Arbitration Act. The case is scheduled to be argued next year, with a decision expected by late June or early July.

Anyone navigating a bankruptcy or facing credit card collection disputes involving arbitration clauses may benefit from consulting a qualified attorney to understand their rights and how ongoing judicial developments could influence their situation.

This article is general information based on SCOTUSblog and court or agency records available at publication time. It is not legal advice; laws and deadlines differ by state and by case. Published November 6, 2026.