When you file a petition with the Bankruptcy Court, it immediately shields you from most further acts by creditors to collect on debt you owe as of the date of that date. The filing automatically invokes an automatic stay under U.S.C. §362(a) of the Bankruptcy Code, which protects your assets from all creditors.
Unfortunately, this stay can become complicated if you are in the midst of a divorce proceeding because it also takes away the critical right of the family court to continue with a divorce action with regard to division of property. For this reason, when a divorce case makes its way into the bankruptcy court, it is generally never straight forward with regard to a resolution. You need to make sure you hire an experienced attorney who understands for bankruptcy and divorce law to help protect your rights.
Exceptions to Bankruptcy Automatic Stay in California Divorce Proceedings & Other Family Law Issues
11 U.S.C. §363(b) provides certain exceptions to the bankruptcy Automatic Stay:
- The establishment of paternity;
- The establishment or modification of child support, spousal support, or family support obligations;
- The establishment or modification of child custody or visitation orders;
- The dissolution of a marriage, (except the division of property that is property of the estate);
- The establishment or modification of domestic violence restraining orders;
- The collection of child, spousal, or family support from property that is not property of the estate; or
- The reporting of overdue support owed by a parent to the Department of Child Support Services.
As a non-filing ex-spouse, you have certain rights to go after your ex-spouse AFTER he or she files bankruptcy and receives a discharge from their debts. U.S.C. §522 (c)(1) of the bankruptcy code provides that all exempt property that the debtor was permitted to keep under the law during a bankruptcy is still exempt against any debts that he or she incurs AFTER they get discharged from bankruptcy EXCEPT for domestic support obligations, such as spousal support and child support. This means that if your ex-spouse owes you back spousal or child support, you may be able to seek to sell his or her property even after bankruptcy proceeding is over.
Call an Experienced Central Valley Bankruptcy Attorney
If you are considering Chapter 7 bankruptcy, it is in your best interest to consult with an experienced bankruptcy attorney to help you learn your legal rights and options, especially with respect to Chapter 7 bankruptcy.