Skip to main content

What exacty does a motion for continuance of an automatic stay do? And what exactly is an automatic stay in bankruptcy?

Loveland, CO |

My ex-husband had a Ch. 13 that he was supposed to be making payments to me on his child support arrears. For over a year, I never saw one single penny and last month their case got dismissed for failing to make their payments. Now, I've received a motion for continuance of the automatic stay under Ch. 7 of title 11. I am trying to figure out (in layman's terms) if this means that they are looking to get all debt dismissed and if so, how does that affect the child support arrears. I think I need to object to the motion of continuance but other than that, I don't know. He owes me a TON of money ($25,000+) and he illegally claims my kids on taxes.

+ Read More

Attorney answers 4

Posted

Sorry to hear, but the good news is that child support and other applicable domestic support obligation is not dischargeable debt under section 523(a)(5) of the BK Code. Per the US Court, an automatic stay is an injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed. A motion for continuance of said stay is a request to keep that injunction in place in the chapter 7 case which has now been filed. The ch7 trustee will verify if he owes support obligation, but his ability to repay is another story.

Posted

Your ex failed in his chapter 13 case. Hje has filed a chapter 7 and is looking for the automatuc stay to be restored. The stay acts to prohibit creditors from taking certain acts to enforce their rights to collect money.

The chapter 7 is a liquidation proceeding. He will not contribute moeny like he was supposed to in chapter 13. He will seek a discharge of his debts.

Certain debts, such as child support, typically are not dischargeable. You need to engage an attorney to assess the situation. You have too much money at risk to go it alone.

It sounds as if your husband may have little money if he did not make any payments for more than a year or he is doing what he can to avoid paying you anything.

Presumably he has an attorney. You should as well. Check with your divorce attorney for advice and a referral or consult the search features here.

Others who are more experienced with the ins and outs of divorce and bankruptcy issues may weigh in as well.

Posted

If a debtor has had a bankruptcy pending within 1 year before filing a second bankruptcy, the bankruptcy stay preventing collection action against the debtor or the debtor's property ends 30 days after the second case is filed UNLESS the court enters an order granting a debtor's motion for an extension or continuance of the stay.

The bankruptcy stay does not prevent collection of domestic support obligations from property (for example, post petition wages) that is not property of the bankruptcy estate. But the bankruptcy stay prevents most other creditors from taking collection action against the debtor or the debtor's property. It may not be a bad deal for someone owed domestic support obligations to let the stay continue to prevent other creditors from being able to collect anything.

If a bankruptcy trustee collects anything for payment to creditors, domestic support obligations are priority claims entitled to payment ahead of general unsecured creditors (for example, credit cards). If the trustee notifies creditors that the case is an "asset case," in which there is money available to pay creditors, it is important to file a timely proof of claim in order to be paid something.

Regardless of whether the case pays anything to creditors, domestic support obligations such as child support are not dischargeable in bankruptcy.

With what's at stake, consulting about child support collection or about your rights in bankruptcy with an experienced attorney licensed to practice in your state may be a good idea.

If you want to know more about the meaning of certain key words used in bankruptcy, see the federal courts' web site for a glossary of bankruptcy terms: http://www.uscourts.gov/Common/Glossary.aspx.

My law firm is a federally designated debt relief agency and helps people in Colorado file for bankruptcy relief under chapters 7 and 13 of the Bankruptcy Code.

Posted

The child support obligation cannot be discharged in bankruptcy. The bottom line is that the motion to extend the bankruptcy stay will likely be granted as a matter of course and it will not have any real effect on you or the child support obligation. You do need to talk with an attorney as you could use help collecting the money due to you.

You can reach Harkess & Salter LLC at (303) 531-5380 or info@Harkess-Salter.com. Stephen Harkess is an attorney licensed in the state and federal courts of Colorado. This answer is for general information only and does not create an attorney client relationship between Stephen Harkess or Harkess & Salter LLC and any person. You should schedule a consultation with an attorney to discuss the specifics of your legal issues.

Bankruptcy and debt topics

Recommended articles about Bankruptcy and debt

What others are asking

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer