One of the most powerful effects of filing a bankruptcy is the Automatic Stay. This Automatic Stay prevents any collection attempts from being made upon the debtor. Thus, every person that the debtor owes cannot continue to pursue the debtor for repayment of the debt.
There are some situations, however, when the automatic stay might not be able to prevent other court proceedings from continuing, at least in part. One of those situations is in family law cases involving child support and custody. Proceedings that are concerned with visitation or with current payment of child support are generally not subject to the Automatic Stay, which means those proceedings will continue despite the debtor having filed for bankruptcy. However, cases that involve past due child support may be subject to the Automatic Stay. These matters will continue if the stay is lifted by bankruptcy court order or once the bankruptcy proceeding has concluded. Sometimes family law judges in such cases will not hear any issues at all, including current child support obligations and current visitation matters, until the Automatic Stay has been lifted.
It is necessary for all debtors to understand that even though the Automatic Stay may stop court proceedings, if there is an order for current child support or alimony already in place, those amounts will continue to accrue. In other words, if an individual is ordered to pay child support or alimony each week, he or she is still required to meet this weekly obligation after a filing for bankruptcy.
There are rare cases where a bankruptcy judge may conclude that an alimony award is not actually “support” but is instead was done for the purposes of “property division” and was simply referred to as “alimony” in the divorce decree in an attempt to circumvent a discharge of the obligation in bankruptcy. If this is the case, the alimony award may be discharged with the rest of the debtor’s unsecured debt.
If you find yourself needing the services of a bankruptcy attorney, please call us at (904) 685-1200.