65 Juv. & Fam. Ct. J. 1 (2014)

handle is hein.journals/juvfc65 and id is 1 raw text is: JUVENILE                                     AC PC
FAMILY COURT                                 NCWCJ
The Automatic Stay In Family Law Proceedings:
Do We Really Have to Stop?
By Judge Margaret Dee McGarity
Since family disasters often come in clusters, many family court judges aren't
sure what can continue in their court and what cannot after one of the parties to the
family court action files a bankruptcy case. The 2005 Act amendments expanded the
exceptions to the automatic stay, so much will remain unaffected. However, a few
proceedings still require bankruptcy considerations and perhaps an order for relief
from the stay. This article is intended to remove some of the mystery of how the
automatic stay affects family court proceedings.
I occasionally hear from attorneys that they have been in family court and the judge
refused to deal with an issue because somebody dropped the B-bomb-one of the parties
was in bankruptcy. If the automatic stay is in effect, as it will be for all bankruptcy filings,
everything grinds to a halt until there is an order from the bankruptcy court lifting the
stay and granting permission to continue. So, until the stay is lifted, the family court
judge probably listens for the hoof beats of the U.S. Marshal galloping down the hall to
carry away anyone who so much as files a paper in a state court matter. Such paralysis may
not be necessary. As a bankruptcy judge, I hope I can add some clarity so we can work
together to resolve these cases which are sometimes more than a bit prickly.
First, I will use gross oversimplification to put bankruptcy cases in context. The
filing of a bankruptcy case creates an estate containing all property interests of the debtor,
with certain exceptions, such as trust interests and most retirement benefits. The estate
includes almost all community property and certain property acquired after the bank-
ruptcy filing. See 11 U.S.C.  541. Certain property can be claimed exempt and removed
from the bankruptcy estate to allow the debtor to keep the necessities of life, provided no
one files a timely objection. See 11 U.S.C.  522. Most individuals file their bankruptcy
cases under chapter 7, which provides for liquidation of the debtor's nonexempt property,
Margaret Dee McGarity has been a United States Bankruptcy Judge for the Eastern District of
Wisconsin since 1987. She served as Chief Judge from 2003 to 2010. Judge McGarity is a frequent lecturer
on various marital property and bankruptcy related topics, especially on the interrelationships between
family law and the Bankruptcy Code. She is the author of numerous articles dealing with the practical aspects
of bankruptcy practice and is a fellow of the American College of Bankruptcy.
Juvenile and Family CourtJournal 65, No. I (Winter)  1
@ 2014 National Council ofJuvenile and Family CourtJudges

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