When you file a petition for bankruptcy protection, whether it’s under Chapter 7 or Chapter 13, you are entitled to the immediate protection of the automatic stay. The automatic stay prevents your creditors from calling or writing you in an attempt to collect a debt, and it will also suspend most legal proceedings to which you are a party. There are, however, certain legal actions that a bankruptcy filing will not affect.
Filing for bankruptcy protection will not have an impact on almost all criminal proceedings against you. Even if the crime is a financial one, such as theft or embezzlement, a criminal prosecution isn’t related to the debt. However, a creditor may be barred from using a criminal complaint to try to collect a debt that is otherwise barred by the automatic stay.
Most Family Law Proceedings
As a general rule, a bankruptcy filing won’t affect most aspects of a divorce proceeding. You can’t use a bankruptcy filing to discharge or avoid paying alimony, child support or spousal support. In Chapter 7, any other obligation imposed on you by a divorce judgment or settlement will not be discharged. In Chapter 13, future debt payments to a former spouse by ways of equitable distribution can be discharged. That said, these types of cases are complex and fact-intensive. For example, whether a particular debt is for equitable distribution (as opposed to alimony or support) is not always clear, and the labels applied may not be dispositive.
Even though the automatic stay goes into effect, a creditor or support payee can always file a motion in the bankruptcyto give them “relief” from the automatic stay to pursue collection of support, alimony or other remedies. Again this is very fact specific.
Secured creditors and landlords can also apply for the automatic stay to be lifted for them to pursue foreclosure or repossession of property or vehicles. The court may be inclined to do that if the creditor can show that doing so is in the interests of justice or that its property rights are not being “adequately protected”. Some examples of when this might happen include:
- You are behind on a mortgage, or are not making payments to stay current going forward.
- A landlord has initiated an eviction, but the order has not yet been entered
- The plaintiff in a personal injury suit wants to continue the suit to collect against available insurance.
Contact Neuner & Ventura, LLP
At Neuner & Ventura, LLP, weprovide a free initial consultation to every client. To set up a meeting, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.
Representing Clients across South Jersey