Will a bankruptcy filing stop my divorce proceeding?
One of the benefits of filing bankruptcy is the automatic stay that generally prevents creditors from proceeding against the debtor, the debtor’s property, or property of the estate to collect a pre-filing debt. This protection allows for the orderly administration of the debtor’s case. In family law matters, bankruptcy law balances the rights between spouses as debtor and creditor, and all of the creditors of the debtor spouse. There are numerous family law exceptions to the automatic stay. A bankruptcy may not stop an action to do any of the following:
- Establish paternity
- Establish domestic support obligations
- Determine or modify child custody or visitation
- Obtain a divorce without equitable distribution or division of property and debts
- Address family abuse
- Collect support from property that is not property of the estate or report overdue support
- Withhold income for payment of a domestic support obligation
The bankruptcy court is concerned about the property subject to the claims of creditors and the possibility of collusion, that is, that a husband and wife may act together under the pretext of a divorce to defeat their creditors.
If property is involved, the safest way to address these concerns is to seek relief from the automatic stay in order to continue the divorce proceeding in spite of the bankruptcy filing. You should consult with your bankruptcy or divorce attorney about the automatic stay and its effect on your divorce.