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Automatic Stay is one of the most powerful effects of bankruptcy filing. It has the power of stopping the lenders from pestering and making collection attempts from the debtor. However, there are some circumstances in which an automatic stay might be unable to prevent continuation of other court proceedings, at least partly.
One of such circumstances arise in family law cases which involve custody and child support. Generally, an Automatic Stay does not work in proceedings related to present payment of child support or visitation. This means that such proceedings will continue despite the filing for bankruptcy by the debtor. However, an automatic stay might work in cases involving due child support of the past. In this case, the proceedings will continue after the conclusion of the bankruptcy case or if the bankruptcy court issues an order to lift off the stay. Sometimes, in such cases, the family law judges don’t even consider such issues at all, including current visitation and child support obligations, until automatic stay is lifted.
It is important for debtors to understand that despite an automatic stay they will have to continue to fulfill their obligation of paying the child support or alimony that they have been ordered to do, even after a bankruptcy filing.
In rare cases, a bankruptcy judge might conclude that an alimony award was simply done to fulfill the purpose of property division and is not an actual ‘support’. Moreover, in an attempt to find a way to get the obligation discharge in bankruptcy, it was referred to as ‘alimony’ in the decree of divorce. In such cases, the debtor might get a discharge of the alimony award along with the rest of the unsecured debts.
For better counselling and guidance about bankruptcy, it is important to consult experienced bankruptcy attorneys. You contact the best bankruptcy attorneys of Los Angeles & Dallas, TX, at Recovery Law Group or on 888-297-6203.