An action to collect a debt awarded to a former spouse in a divorce proceeding, whether the debt is for support or a property settlement, is subject to the automatic stay unless an exception applies.See In re Caffey, 384 Fed. Appx. 882 (11th Cir. 2010); In re Shelnut, 2017 WL 1078535 (Bankr. S.D. Ga. 2017); and Jordahl v. Dyal (In re Jordahl), 555 B.R. 861 (Bankr. S.D. Ga. 2016), each discussed infra. The Code further provides that ". . . an individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, may recover punitive damages."
In re Trout, 414 B.R. at 920-21; see also In re McClendon, 2012 WL 4758363, at *2 (Bankr. S.D. Ga. Sept. 14, 2012)(citing Carver when granting relief from stay where the debtor had been incarcerated for contempt, still owed a substantial amount of domestic support obligations, the amount necessary to purge the contempt had been set by the state court, and the chapter 13 plan proposed payments contrary to the superior court order). The Eleventh Circuit in In re Caffey, 384 F. App'x 882, 885 (11th Cir. June 23, 2010) upheld the bankruptcy court's decision not to abstain where there was no evidence the bankruptcy was being used a weapon and where the bankruptcy estate would be harmed if the debtor was incarcerated because he needed to work to pay off his creditors, and where the debtor was not hiding his bankruptcy filing in order to maintain his violation of the stay complaint for damages. Caffey, 384 F. App'x at 885-86. Similarly, the bankruptcy court in Fullwood distinguished Carver denying a motion to lift the stay to enforce a pre-petition domestic support judgment against the debtor because it found the bankruptcy court would not be required to "delve too deeply into family law."
Courts generally hold that garnishments that continue postpetition are acts to collect a debt on behalf of the creditor, regardless of whether the creditor takes any affirmative actions postpetition. See, e.g., Russell v. Caffey (In re Caffey), 384 F. App'x 882, 886-87 (11th Cir. 2010) (citing Lawrence Ath. Club v. Scroggin (In re Scroggin), 364 B.R. 772, 781 (10th Cir. B.A.P. 2007) (ongoing garnishment was a violation of the automatic stay)); Zestee Foods, Inc. v. Phillips Foods Corp., 536 F.2d 334 (10th Cir. 1976); Roche, 361 B.R. at 621. "The automatic stay is considered 'one of the fundamental debtor protections provided by the bankruptcy laws."
Those cases, too, make a distinction between criminal contempt proceedings, which by virtue of Section 362(b)(1) are not subject to the automatic stay, and civil contempt proceedings, which are. See, e.g., In re Caffey, 384 Fed.Appx. 882, 886 (11th Cir. 2010) (“[W]e conclude that the bankruptcy court did not clearly err in finding that the state court contempt action was civil in nature and thus subject to the automatic stay.”); In re Wohleber, 596 B.R. 554, 569 (B.A.P. 6th Cir. 2019) (“[C]ivil contempt proceedings are subject to the automatic stay, while criminal contempt proceedings are not[.]”)
The Supplemental Complaint provided Ferguson with the information necessary to prepare a response. The Court therefore finds that Ferguson waived his opportunity to challenge the lack of issuance of a Notice to Appear and proceeds to assess whether the allegations in the Supplemental Complaint state a claim for relief against Ferguson. See In re Caffey, 384 Fed.Appx. 882, 884 (11th Cir. 2010) (“objections to insufficient service of process are deemed waived if not first made in a Rule 12 motion or responsive pleading”) (citing Fed.R.Civ.P. 12(h)).
Numerous cases confirm that the automatic stay imposes an affirmative duty on creditors to stop collection actions they have initiated, even if third parties carry out the violative acts. See, e.g, In re Caffey, 384 Fed. Appx. 882, 886 (11th Cir. 2010) (unpublished) (doubting creditor's legal position that she had no affirmative duty to delay a contempt order and arrest warrant against debtor because contempt order was issued prior to debtor's bankruptcy case); In re Valentine, Case No. 19-40593-705, Adv. No. 19-04022-705, 2020 WL 424570, *21 (E.D. Mo. Jan. 27, 2020) ("A creditor, who has put a collection effort into motion must affirmatively act to stop, stay, or hold the collection effort in abeyance or risk incurring liability once a bankruptcy commences."); In re Banks, 253 B.R. 25, 30 (Bankr. E.D. Mi. 2000) ("many courts have emphasized the obligation incumbent upon creditors to take the necessary steps to halt or reverse any pending State Court actions or other collection efforts commenced prior to the filing of a bankruptcy petition, including garnishment of wages, repossession of an automobile, foreclosure of a mortgage or a judgment lien and, thereby, maintain, or restore, the status quo as it existed at the time of the fil
S.D. Ga. 2016) ; In re Caffey , 384 B.R. 297 (Bankr. S.D. Ala. 2008) aff'd 384 Fed.Appx. 882 (11th Cir. 2010) ; see alsoIn re O'Brien , 574 B.R. 369 (Bankr. N.D. Ga. 2017) (finding a willful violation of the stay where ex-spouse filed a post-petition contempt motion alleging debtor failed to comply with prepetition state court order requiring the payment of attorney's fees under a domestic order related to paternity and child custody). Such post-petition efforts to collect or force payment would be in violation of the stay, would be void ab initio , and would also expose the violating parties to an award of actual and punitive damages under § 362(k).
In Russell v. Caffey (In re Caffey ), an unreported Eleventh Circuit decision, a state court found the debtor to be in contempt for failing to make back child support payments just prior to a bankruptcy filing and was arrested just after the bankruptcy filing. 384 F. App'x 882, 884 (11th Cir. 2010) (per curium ). There, as here, the creditor argued that once the debtor had been found in contempt, "she had no affirmative duty to delay the contempt order and arrest warrant because they materialized after her involvement in the proceedings ceased."
Prior to confirmation, a child support creditor is unable to attempt to collect child support from the debtor because, prior to confirmation, all property is the property of the bankruptcy estate and § 362(b) allows for an exception for stay only as to funds which are not part of the bankruptcy estate.Id. at 28 (emphasis added); see alsoCaffey v. Russell (In re Caffey ), 384 B.R. 297, 306 (Bankr.S.D.Ala.2008) (holding that continuation of state court contempt action to recover past-due child support was subject to automatic stay), aff'd, 384 Fed.Appx. 882 (11th Cir.2010).All property acquired both pre- and postpetition is property of the bankruptcy estate preconfirmation because, with exceptions not relevant here, property of the estate under chapter 13 includes “all legal or equitable interests of the debtor in property as of the commencement of the case,” 11 U.S.C. § 541(a)(1) ; and “all property of the kind specified in [§ 541 ] that the debtor acquires after the commencement of the case but before the case is closed, dismissed, or converted,” as well as postpetition wages, 11 U.S.C. § 1306(a)(1)–(2).