The automatic stay is like a forcefield against creditors. It blocks everything from phone calls from debt collectors to foreclosure proceedings. But that doesn’t mean it works against everything. Here’s a non-exhaustive list of actions by public and private entities that section 362 of the Bankruptcy Code explicitly allows past the automatic stay. It’s a broad list.
- Criminal proceedings against the debtor
- Civil actions that: establish paternity, create or alter domestic support obligations, concern child custody or visitation rights, dissolve marriages (except to the extent they don’t alter the bankruptcy estate), or regard domestic violence claims
- Collections of money for domestic support obligations from property not part of the bankruptcy estate or from income withheld from the debtor
- Withholding of a driver’s, occupational, or recreational license
- Interception of tax refunds
- Acts by the trustee to perfect an interest in property of the bankruptcy estate
- Enforcement actions by government entities enforcing a chemical weapons ban (yes, this is actually in the Bankruptcy Code)
- Certain contractual rights by parties in securities transactions
- Certain foreclosure actions by the Department of Housing and Urban Development
- Tax audits, notices of tax deficiencies, demands for tax returns, or tax assessments
- Acts by landlords of nonresidential real estate to repossess property rented by the debtor under a lease that has expired
- Foreclosure actions by the Department of Transportation or Commerce Department against a chapter 11 debtor’s nautical vessels
- Accrediting and licensing decisions if the debtor is an educational institution
- Perfection of liens on property for property taxes
- Withholding of the debtor’s income to repay a loan from a retirement account
- Eviction actions against a debtor when the landlord has obtained a judgment against the debtor, though this is complicated by section 362(l), which extends the automatic stay for debtors provided certain conditions are met
- Eviction actions against a debtor who has endangered his or her landlord’s property or used controlled substances on it
- Setoffs for income-tax refunds
- Exclusions by the Department of Health and Human Services of the debtor’s participation in any federal health care program, including Medicare
In total there are 27 subsections to section 362(b), and the statute itself fleshes out the ones listed here in greater detail. It is clear, though, that the Bankruptcy Code does not intend the automatic stay to bar all unwanted demands from the outside world for the debtor’s money or rights. Many of these, like domestic support obligations, may be familiar to many debtors, but others might not.
If you are experiencing financial difficulties (and aren’t working with chemical weapons), and you think that the automatic stay may not protect you from all claims, then you definitely need an experienced New York bankruptcy lawyer to handle your case.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.