Relief from the Automatic Stay
Bankruptcy courts routinely acknowledge state court expertise in financial and non-financial domestic relations matters. Consequently, bankruptcy courts usually abstain from domestic relations matters and remand them to stat courts or expressly grant relief from the stay under §362(d) to permit state courts to resolve them.
Actions to determine the division of property attendant upon dissolution of the marriage are still stayed by a bankruptcy. Thus, to pursue these matters in state court, a litigant must still obtain an order lifting the stay. Many bankruptcy courts previously allowed property rights to be determined but prohibited the actual property division until the bankruptcy case was concluded. It is reasonable to assume that this practice will continue after the 2005 amendments. In many jurisdictions, trustees often agreed to relief from the stay but reserved the right to approve any determination of property rights. This practice, too, is likely to continue after the 2005 amendments.
See Also: Chapter 7 Bankruptcy

