In the midst of a protracted child custody dispute, a Debtor filed a Ch. 13. Previously this Debtor was ordered to pay legal fees incurred from the custody case.
A non-bankruptcy Court may determine if the automatic stay applies toward a debt. U.S. District Courts have appellate jurisdiction over decisions of the Bankruptcy Court. The Opinion from the Eastern District of MI, Southern Division District Court agreed with the Orders of the Bankruptcy Court.
The Bankruptcy Court correctly found there should be relief from an automatic stay here. A state Circuit Court had already pronounced the legal fees of a child custody dispute as non-dischargeable.
The Bankruptcy Court also found that as the exception to the automatic stay did apply… the state Circuit Court was proper, in exercising jurisdiction deciding the non-dischargeability of these attorney fee debts. Attorney fees resultant from child support collection efforts “fit within the exception to the Bankruptcy Code’s automatic stay provision”.
Because the debt at issue was an Order for a domestic support obligation…”consequently, the automatic stay did not apply to it”, as the debt was established by “an order of a court of record” (see Sec. 101 of the Bankruptcy Code).