Monday, February 6, 2012

The Interplay of the Automatic Stay, Child Support, and Alimony

One of the most significant benefits of filing for bankruptcy is the Automatic Stay. In short, the Automatic Stay halts other existing court proceedings that the individual filing for bankruptcy is involved in, as well as any collection efforts for the individual's debts, until the bankruptcy proceedings are resolved.

In certain situations, the Automatic Stay might not prevent other court proceedings from continuing, at least in part. For example, in any family law case involving child support and custody, issues involving visitation or current child support are not subject to the Automatic Stay, but issues involving past due child support will be continued until the Automatic Stay is lifted at the end of bankruptcy proceedings. It is possible that a judge in this instance will actually not hear any issues at all until the Automatic Stay is lifted, but the circumstances might be such that the issues of visitation or current support need to be addressed in a more timely manner.

It is important to understand that although the Automatic Stay will halt court proceedings, any existing order for current child support or alimony will still accrue. In other words, an individual that is obligated to pay child support or alimony each week will not be relieved of this after a filing for bankruptcy, whether the person filing for bankruptcy is the individual who is supposed to pay the alimony or child support, or the individual who is to receive the alimony or child support. The Automatic Stay should, however, suspend efforts to collect any arrearage.

Additionally, for individuals that file for bankruptcy who are to receive alimony or child support payments and are owed an arrearage, any past due child support or alimony obligations and any current child support or alimony obligations are exempt from the bankruptcy proceedings, meaning that a bankruptcy trustee may not use this support to pay other creditors.

Should you have any questions about family law matters or bankruptcy, contact Attorney Jonathan R. Eaton by calling 508.655.5980 to schedule a one hour initial consultation.

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