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Bankruptcy Filing and Matrimonial Actions (and actions against former spouses)

| Mar 10, 2021 | Family Law |

When your spouse or ex-spouse files for bankruptcy, your attempts to collect debts must stop unless they fit within one of the “automatic stay” exceptions in the bankruptcy statute. See 11 U.S.C. §362. Automatic stay provisions go into effect immediately upon the filing of any type of bankruptcy proceeding. This stay is broad and prohibits the commencement and/or continuation of many legal actions against the debtor and/or his/her property.
The automatic stays prevent the commencement or continuation of an action against the debtor for equitable distribution of marital property if (1) the action involves property that is included within the debtor’s bankruptcy estate or (2) the claim for equitable distribution arose before the debtor filed for bankruptcy and it is not joined in an action for divorce. The automatic stays likewise preclude any action to establish, enforce, or collect a pre-bankruptcy debt incurred in connection with divorce or separation that is not a debt for a support (maintenance and/or child support) obligation. Further, the automatic stays prevent the creation or enforcement of a lien for pre-bankruptcy or post-bankruptcy maintenance and/or child support obligation(s) against property that is property of the debtor’s bankruptcy estate.
However, individuals seeking to avoid their support obligations by commencing a bankruptcy action should proceed with caution. The automatic stay provisions within the Bankruptcy Code contain specific exceptions with regard to family law matters. For example, the automatic stays do not apply to the commencement or continuation of a legal proceeding against the debtor in divorce proceedings (except to the extent that the action seeks to determine the division of property that is property of the estate), or to actions to establish or modify a maintenance or child support order. Thus, a current debt relating to child support and/or maintenance is enforceable against the bankruptcy debtor without further intervention from the Bankruptcy Court.