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Bankruptcy and Divorce: Automatic Stay:
(Provided by: Divorce Source, Inc. Staff)

When a bankruptcy petition is filed, a stay automatically goes into effect of all actions by creditors to collect pre-petition debts or to exercise control over property of the estate. 11 U.S.C. 362(a). Any actions in violation of the automatic stay are void. In re Schwartz, 954 F.2d 569 (9th Cir. 1992). If a creditor knows that there is a bankruptcy case pending and performs an act in violation of the automatic stay, the creditor must be sanctioned even if it believed in good faith that the action would not violate the automatic stay. 11 U.S.C. 362(h).

A creditor may ask that the stay be vacated or modified to permit the desired action to be performed. 11 U.S.C. 362(d). In addition, certain acts are excepted from the automatic stay, e.g. (1) the commencement or continuation of a criminal action or proceeding against the debtor, 11 U.S.C. 362(b)(1) and (2) the commencement or continuation of a proceeding to (a) establish paternity, (b) establish or modify a support award, or (c) collect support from property that is not property of the bankruptcy estate. 11 U.S.C. 362(b)(2).

Go to: Bankruptcy and Divorce Informational Section

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