June 21, 2018 By:
When you file a bankruptcy petition, seeking to discharge debts under Chapter 7 or reorganize your obligations under Chapter 13, an automatic stay immediately goes into effect. One of the effects of the automatic stay is the suspension of legal actions against you. But there are limits to the scope of the automatic stay.
As a general rule, if you have incurred debt through an illegal activity—embezzlement, theft or destruction of property—filing any type of bankruptcy petition won’t have any effect on the criminal proceedings against you. There are two exceptions—debts arising from overpaid government benefits, such as Social Security; and debts incurred because you damaged government property. In those situations, you can suspend criminal prosecutions to recover those amounts.
You can’t discharge or restructure child support or spousal support through a bankruptcy proceeding. Filing for bankruptcy protection won’t suspend your obligation to make court ordered payments for support. You can, though, use a Chapter 13 filing to negotiate a new property settlement.
It’s also important to understand that, even though the automatic stay may go into effect, the court has the authority to remove the stay, either on its own initiative or pursuant to a request from a creditor. Some specific situations where that might happen include:
I offer a free initial consultation to all potential bankruptcy clients. Contact my office by e-mail or call me at 972-772-3083 for a private meeting. With offices in Rockwall, Texas, I represent clients in Heath, Greenville, Lavon, Wylie, Mesquite and Rowlett.