When Bankruptcy cannot stop creditors

Sacramento Bankruptcy Lawyer tips on Creditors

Some collections and actions against you cannot be stopped by filing for bankruptcy. Below is a list of most of those exceptions.

  1. Certain IRS proceedings such as tax assessments, tax audits, tax deficiency notices
  2. Child support and alimony payments
  3. Child custody actions
  4. Child support adjustments
  5. Withholdings from income to repay loans taken out from ERISA qualified retirement benefits

    With regard to domestic support obligations, these are non-dischargeable only if they were established in a separation agreement (or divorce decree), by a court order, or by a government agency charged with imposing domestic support obligations. 

    Under the old bankruptcy rules, obligations to a former spouse or child were discharged unless these parties appeared in the bankruptcy court to contest the discharge.  Under the new bankruptcy laws, however, these support obligations automatically survive a bankruptcy action. 

    The new bankruptcy legislation did not alter the rights accorded to domestic partners in this regard.  Thus, a debt arising from a separation agreement between domestic partners would probably be dischargeable via bankruptcy.  This is yet another example of a civil union not extending the same rights as a legal marriage. 

    If your debt load stems primarily from one of the above enumerated categories Chapter 7 may not be the best option for you, given that bankruptcy will not affect these types of payment obligations.  However, Chapter 13 may provide you a way to pay down these debts over time.

    This part goes in the Relief from the automatic stay section (http://www.rinnelaw.com/lawyer-attorney-1408474.html)
    Here, again, I would make this title initial caps.  Also, it’s customary to have two spaces after a period.  I don’t know if you use just one for stylistic purposes.

    The creditor can file a formal motion to lift the stay of bankruptcy.  A motion is a formal legal procedure to ask the judge to rule on a certain issue.  Formal documents have to be filed with the court and the debtor will be notified and will be given the opportunity to object to the motion.

    One of the main reasons a creditor may file a motion for relief from the automatic say is fraud.  If a creditor feels a debtor acted with the intent to defraud itself and the court by filing for bankruptcy the bankruptcy court may very well grant the motion to lift the stay. 

    One example of fraud is when a debtor gives away property to friends and family before they file in order to preserve assets or have some say in their distribution.  Another action that raises the issue of fraud is when debtors purchase big-ticket items when it’s clear they don’t have the means to pay for them.  Lastly, concealing assets in any way is an obvious indicator of fraud and will definitely negatively impact your case.