Enforcing Child Support when the Obligor is in Bankruptcy
POLICY INTERPRETATION QUESTIONS
DATE: July 23, 2007
TO: State and Tribal IV-D Directors
FROM: Margot Bean
Office of Child Support Enforcement
SUBJECT: Additional Information Regarding Enforcing Child Support when the Obligor is in Bankruptcy.
BACKGROUND: On September 22, 2006, the Federal Office of Child Support Enforcement (OCSE) issued Action Transmittal OCSE-AT-06-05. The AT contained an attachment with policy questions and responses to miscellaneous issues regarding child support provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (Public Law 109-8, April 20, 2005). OCSE has received inquiries from States seeking additional clarification regarding some of OCSE's responses.
Bankruptcy actions filed before October 17, 2005, the effective date of most of the provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), are not subject to BAPCPA's provisions and OCSE responses regarding BAPCPA's new child support related provisions were written regarding new cases. In any case, States should consult with their attorneys and their local bankruptcy courts regarding local court interpretations and procedures.
OCSE also wants to remind States to inform their ACF OCSE Regional Program Manager regarding any changes in the addresses for notices of domestic support obligations so that OCSE may provide updated information to the Department of Justice for posting on its U.S. Trustee Program's website (http://www.justice.gov/ust/eo/private_trustee/ds/).
This PIQ provides additional information to address State inquires regarding two specific questions and responses in AT-06-05.
AT-06-05 Q&A 15 regarding Automatic Stay:
Question 15: Will state child support agencies be prohibited by the automatic stay from filing executions/liens, contempt actions, motions for judgments, and other actions not enumerated in section 214 during a bankruptcy proceeding?
Answer: State child support agencies should continue to file enforcement actions that were allowed prior to the new legislation.
States asked OCSE whether they were correct that State child support agencies are only permitted to continue with such actions as would have been permitted under the former version of the Bankruptcy Code (with the exception of those specifically enumerated in section 214) and thus filing executions/liens and contempt actions would be prohibited.
OCSE's answer is yes; IV-D agencies are permitted those actions allowed under the former code and those added to 11 U.S.C. 362(b) by section 214. BAPCPA did not modify the items covered by a stay that were set forth in 11 U.S.C. 362(a); it merely added new exceptions in subsection (b) of section 362. Filing new executions/liens against property of the estate [11 U.S.C. 362(a)(4)] was prohibited under the former version and remains prohibited. However, there is no explicit bankruptcy law requirement that a IV-D agency remove an existing lien. The agency must not "create, perfect, or enforce" on either property of the estate or property of the debtor regarding "a claim that arose before the commencement" of the bankruptcy case [11 U.S.C. 362(a)(4)&(5)]. A civil contempt action [11 U.S.C. 362(a)(1)] is stayed, but "criminal action" against the debtor is not stayed [11 U.S.C. 362(b)(1)]. Tax refund offset was prohibited under the former version, but is now permitted [11 U.S.C. 362(b)(2)(F)].
AT-06-05 Q&A 17 regarding Passport Restriction:
Question 17: Can a state child support agency submit a passport denial request to the Department of State after a bankruptcy case has been filed?
Answer: Yes, passport denial requests may continue to be electronically submitted to OCSE for forwarding to the Department of State even after a bankruptcy filing.
States asked OCSE to provide a specific citation authorizing States to continue to submit passport restriction requests, or otherwise to provide guidance as to how OCSE arrived at such answer, since passport restriction is not mentioned in the list of statutory exclusions from the automatic stay provisions in bankruptcy law.
OCSE's answer is that a U.S. passport is not property of the debtor and, therefore, is not "property of the estate" which would be subject to bankruptcy automatic stay provisions [11 U.S.C. 362]. Department of State regulations provide that "A passport shall at all times remain the property of the United States and shall be returned to the Government upon demand"
[22 C.F.R 51.9] and a passport "shall not be issued in any case in which the Secretary of State determines or is informed by competent authority that: … (8) The applicant has been certified by the Secretary of Health and Human Services as notified by a State agency under 42 U.S.C. 652(k) to be in arrears of child support …" [22 C.F.R 51.70]
Inquiries should be directed to the appropriate ACF OCSE Regional Program Manager.
REFERENCES: OCSE AT-06-05, Policy Questions and Responses to Miscellaneous Issues regarding Child Support Provisions of the New Federal Bankruptcy Law, P.L. 109-8, dated September 22, 2006, and OCSE IM-05-05, New Federal Bankruptcy Law Contains Child Support Provisions, dated May 4, 2005.
cc: ACF/OCSE Regional Program Managers