The second your attorney files your bankruptcy petition most collection efforts must automatically stop. This is known as the “automatic stay” in bankruptcy. There are a few things that the automatic stay doesn’t apply to, however.
The automatic stay does not stop a divorce case. Bankruptcy Code Section 362(b)(2)(a)(iv) states:
(b) The filing of a petition under section 301, 302, or 303 of this title, or of an application under section 5(a)(3) of the Securities Investor Protection Act of 1970, does not operate as a stay—
(2) under subsection (a)— (A) of the commencement or continuation of a civil action or proceeding—
(iv) for the dissolution of a marriage, except to the extent that such proceeding seeks to determine the division of property that is property of the estate;
What that means is that while the divorce case can proceed, the couple will need the bankruptcy court’s permission to divide the marital assets or wait until the bankruptcy is discharged and closed.
