Division of Child Support Services
Employee Reference Guide – Standard Operating Procedure 323
To provide general guidance for staff of the Division of Child Support Services (DCSS)
to follow when they are notified that a non-custodial parent (NCP) has filed bankruptcy.
State Authority / Reference:
Georgia Law, O.C.G.A. §44-13-100
Bankruptcy Power Point
Federal Authority / Reference:
Chapter 7: 11USC §701 et. seq.; Chapter 11: 11USC §1101 et. seq.;
Chapter 12: 11USC §1201 et. seq.; Chapter 13: 11 USC §1301 et. seq.;
The Automatic Stay: 11 USC §362; Dischargeability: 11 USC §524, 727, 1328.
All Georgia Child Support offices receiving Title IV-D funds including all private vendors
contracted with the Department of Human Services to provide child support services.
Required Case Conditions:
Any IV-D Case where bankruptcy is claimed or filed.
You must act immediately when you become aware of an NCP in your caseload who
has filed for bankruptcy. Your first action is to notify and consult with your local attorney
who will determine the appropriate course of action to take since some federal
bankruptcy districts in Georgia allow an Income Deduction Order for current support to
remain in place while others will not. Generally, all enforcement actions must be
terminated as discussed below unless and until your attorney obtains a “Relief of Stay”
through the Bankruptcy Court. Until then, the agency is “stayed” from making demands
for payments during the pending bankruptcy.
323.01 Notice that NCP has Filed Bankruptcy
DCSS will receive notification from the U.S. Bankruptcy Court that the NCP has filed for
bankruptcy in one or more of the following ways.
Notices Received at the State Office
The DCSS State Office address is listed with the National Creditor Registration Service
as the preferred mailing address to which bankruptcy notices should be sent. When the
State Office receives bankruptcy notices, they will take the following steps:
1. Mail is opened, date stamped, and counted;
2. Agent sorts by filing type, screens $TARS, updates the “Y” indicator for all
correspondence, updates the Bankruptcy Filing Date, if known, and documents
the CAL on all NCP cases. If necessary, the Bankruptcy Trustee is contacted to
obtain identifying information about the debtor;
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3. The following critical documents are scanned at the State Office and e-mailed to
the local legal office Attorney, Office Manager, and Generic Office E-mail:
a. Notices of Filing on Chapter 7 or Chapter 13
b. Notices of Hearing on Objection to Proof of Claim or any other Hearing
c. Chapter 13 Plan
d. Confirmation Orders;
e. Amendment or Modifications to a Plan
g. Discharge Notification
h. Objection to Proof of Claim
i. Notice of the Meeting of Creditors
j. Notice of Filing of Modification of Confirmed Plan
*If the NCP has multiple cases, all offices will be notified.
4. All documents are mailed to SMI for imaging;
5. SMI will send an email to the local office Generic Office E-mail address in
approximately 5 business days when the images are available for viewing;
6. If no $TARS case exists, documents are held for 30 days before being
Notices Received at the Local Office
Local legal offices may receive bankruptcy notices directly from the Bankruptcy
Trustees, Bankruptcy Court, and the State Office. The local legal office will take the
I. Notices Received from the State Office
1. Bankruptcy notices will be immediately directed to the local attorney. They will
decide the appropriate action and forward the file to the designated employee to
complete the Bankruptcy Checklist, A&I, and Proof of Claim, if applicable, and
update the Bankruptcy Screen on $TARS;
2. The local attorney or designated authority will include the local office address on
all responses to bankruptcy notices for future correspondence to be mailed
directly to the local office;
3. File will be returned to the Attorney who will proceed with appropriate actions
and the CAL will be updated on all NCP cases.
II. Notice Received from Bankruptcy Court or Trustee
1. Documents are received, date stamped, and forwarded to the designated
authority for screening in $TARS, updating the “Y” indicator and appropriate
date fields on the Bankruptcy Screen on $TARS, and document the CAL on all
NCP cases. If necessary, contact the Bankruptcy Trustee to obtain identifying
information about the debtor ;
2. Documents are copied and mailed to SMI for imaging;
3. Original documents are forwarded to the attorney for review;
4. The attorney will decide the appropriate action and forward the file to the
designated employee to complete the Bankruptcy Checklist, A&I, and Proof of
Claim, if applicable;
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5. The attorney or designated employee will include the local office address on all
responses to the Bankruptcy Notices designating that all future correspondence
should be mailed directly to the local office;
6. File will be returned to the Attorney who will proceed with appropriate actions
and to ensure that the CAL is updated on all NCP cases;
7. If no $TARS case exists, documents are held for 30 days before being
Note: Notices received directly at FSR from the Bankruptcy Court or Bankruptcy
Trustee will be forwarded to the State Office for processing as stated above
If the Bankruptcy Notice is for Chapter 7, Chapter 11, Chapter 12, or Chapter 13, a "Y"
indicator in the Bankruptcy field will be inserted. This will cause all enforcement
actions to stop.
323.02 Calls Received from the NCP
An NCP may call the Contact Center, the Director’s Communication Group, or the Tax
Offset Unit to report that a bankruptcy claim has been filed.
The following actions should be taken:
a. Advise the NCP that the local legal office will be notified to take appropriate
b. CC Agent will send and escalation to the local legal office;
c. DCG will send an email to the local legal office (Agent, Manager, Attorney);
d. TOU will send an email to the DCG;
e. Document the CAL.
323.03 NCP Walk-Ins
An NCP may report a bankruptcy filing during an office visit without supporting
The following actions should be taken:
a. Advise the NCP that the filing will be confirmed and that the appropriate actions will
b. Access PACER to confirm the filing or call the Multi-Court Voice Case Information
System (MCVCIS) at 1-866-222-8029;
c. If the filing is confirmed, change the bankruptcy indicator to “Y”;
d. Notify your local Attorney who will advise you of the next appropriate action;
e. Document the CAL.
323.04 STARS Bankruptcy Coding
The Bankruptcy Indicator should be activated and changed to “Y”. $TARS will trigger
the following actions on all of the NCP’s cases when the next appropriate action is
scheduled to occur:
1. Decertification from state and federal tax offset for the current tax year. If the case
has already been certified for the month, decertification will take place on the 2 nd
weekend of the following month;
2. No new $TARS system-generated enforcement letters, Fatherhood letters, FIWs or
NMSNs will be sent to the NCP;
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3. The Credit Bureau will be notified. If the case has already been certified for the
month, decertification will take place on the 2nd weekend of the following month;
4. Case Action Logs will be generated to show:
a. Bankruptcy status changed to “Y”;
b. All updates to the Bankruptcy Screen;
c. Decertification of FTAX and STAX;
5. Prompts will be disabled, except for the following:
a. A new prompt stating that the bankruptcy indicator has been changed from “_“
to “Y”, from “N” to “Y” or from “Y” to “N“;
b. Case is due for Bankruptcy Review.” That prompt will be generated 6
months after the Bankruptcy Indicator has been marked with a “Y”.
Note: $TARS only certifies cases for the current tax year and not previous tax years;
therefore, if an NCP files a tax return for multiple tax years and is in active bankruptcy
status only the current tax year needs to be decertified.
323.05 Other Actions Agents Must Take
1. Stop all enforcement actions until you discuss the case with your attorney who must
take appropriate actions in response to the filing. Your attorney should advise when
it is appropriate to disable the Bankruptcy Indicator. By disabling the Bankruptcy
Indicator (changing to “N”), $TARS will recertify the case for state and federal tax
offset, certification to the Credit Bureau, and reactivate $TARS system-generated
2. If income withholding was terminated, your attorney will advise you if a new FIW
should be issued. This is generally done after receiving approval from the NCP’s
attorney or when the plan is confirmed.
323.06 UIFSA Cases
A. Responding Cases
If Georgia is the responding state and the NCP has filed a bankruptcy claim the
following actions should be taken:
1. Follow steps outlined in 323.01 above
2. Generate CSENET transaction MSC, P, GSPUD to the initiating state and enter
bankruptcy information in the comment box;
3. Mail a UIFSA TRANSMITTAL #2 – SUBSEQUENT ACTIONS IEU to report the
filing date and type;
4. Document the CAL.
B. Initiating Cases
If Georgia is the initiating state and you become aware that the NCP has filed a
bankruptcy claim the following actions should be taken:
1. Generate CSENET transaction MSC, P, GSPUD to the initiating state and enter
bankruptcy information in the comment box;
2. Mail IEU to report the filing date, type and the bankruptcy district, if known; If
bankruptcy documents were received make a copy for our records and mail the
original to the responding state;
3. Document the CAL.
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THE BASICS OF BANKRUPTCY AND GUIDELINES FOR DCSS ATTORNEYS IN
DEALING WITH BANKRPUTCY
The types of bankruptcies you will see are:
Chapter 7: "Straight Liquidation" 11 U.S.C. §701 et. seq.
In this bankruptcy, all of the debtor's non-exempt property owned, as of the time of filing,
is sold by the Trustee and used to pay claims of creditor. Soon after the bankruptcy is
filed (usually in about 90 days), the court issues an order discharging the debtor from all
dischargeable debts, and the bankruptcy case is over. A Chapter 7 bankruptcy is
usually filed when the debtor has no non-exempt assets available to pay creditors.
Chapter 13: "Wage Earner" 11 U.S.C. §1301 et. seq.
This type of bankruptcy is available to individuals who have regular income and whose
total debts do not exceed $360,475.00 for unsecured debts and $1,081,400.00 for
secured debts. Instead of property being liquidated, the debtor makes monthly
payments to the trustee out of the debtor’s income, and the trustee makes periodic
distributions to creditors over the length of the court-approved bankruptcy plan, which
usually lasts from three to five years. When the debtor successfully completes the plan,
the court discharges the debtor of all dischargeable debts, and the bankruptcy is over.
Under no circumstances will a Chapter 13 last more than 5 years from the date of
Chapter 11: "Reorganization" 11 U.S.C. §1101 et. seq.
This chapter is usually used for business reorganizations, although it is also available to
individuals whose debts exceed the limits for a Chapter 13 filing.
Chapter 12: "Family Farmer" 11 U.S.C. §1201, et. seq.
This chapter is designed for family farmers whose debts exceed the limits for a Chapter
Chapters 1, 3 and 5 of the Bankruptcy Code contain general provisions, and these
chapters are applicable to all of the above types of bankruptcies. In addition, the
Federal Rules of Bankruptcy Procedure are applicable nationwide to all cases. Your
local district and regional Bankruptcy Rules should also be consulted for the rules of
practice in your particular jurisdiction.
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How a bankruptcy case proceeds:
1. A petition is filed, which invokes the protection of the Automatic Stay. Many child
support actions are expressly exempted from the provisions of the automatic stay.
See 11 U.S.C. § 362(b)(2). However, notwithstanding these express exemptions,
the terms of a confirmed plan control and bind child support creditors under current
Eleventh Circuit precedent.
2. The debtor then files their supporting schedules showing assets, liabilities and
claimed exemptions pursuant to O.C.G.A. §44-13-100.
3. In a Chapter 13 case, the debtor also files a Chapter 13 Plan, which sets out how
much he will pay the Trustee each month and the amount that will be distributed to
each class of creditors.
4. The Clerk sends a notice to all creditors listed on the schedules. This notice advises
you of the pendency of the bankruptcy, the chapter, date of filing, debtor's attorney,
date of the 1st Meeting of Creditors (also known as the 341 meeting), and the bar
date for filing a Proof of Claim.
5. Creditors file a Proof of Claim. Most chapter 7 bankruptcies are "no-asset" cases,
and the notice will instruct you not to file a Proof of Claim in such cases.
6. In a Chapter 7 case, the Trustee administers all non-exempt property which is sold
or abandoned and any proceeds are distributed to creditors in the priority
established by the Bankruptcy Code. The debtor is then discharged from all
7. In a Chapter 13, the debtor begins paying monthly payments to the Trustee. These
payments continue for three to five years, and the case is not over until the debtor is
discharged at the end of the plan (unless the case is dismissed due to failure to
comply with the Bankruptcy Code or the terms of the confirmed plan).
Note: The Automatic Stay continues for the duration of the case.
What you need to do in a Chapter 7:
1. Unless the case is a "no-asset" case, file a Proof of Claim in duplicate. Attach a
copy of the child support order and a certified payment history. Identify the debt as a
non-dischargeable priority child support debt. If you had filed a fi fa or other lien
before the bankruptcy was filed, designate your claim as a “secured claim“. If the
claim is filed as a secured claim and the debtor does not have sufficient assets to
attach to the secured claim, then the debtor will file an objection to claim. In the
event there are not sufficient assets, then the claim should be reclassified as a
2. Since post-petition earnings are not property of the bankrupt estate in a Chapter 7,
you can proceed with enforcement against post-petition wages either by IDO,
garnishment or a Withhold and Deliver. However, in order to avoid a potential
violation of the automatic stay, make sure that the garnished wages are post-petition
It is generally not feasible to seek relief from the Automatic Stay in a Chapter 7
because the debtor typically will receive a Chapter 7 discharge from all
dischargeable debts in about ninety (90) days, and you can go after post-petition
wages for post-petition obligations without obtaining relief from the stay.
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What you need to do in a Chapter 13:
1. File a Proof of Claim (see instructions for Chapter 7 above).
2. If applicable, object to confirmation of the Chapter 13 Plan. An objection should be
filed if the plan provides for less than 100% payment of the outstanding child support
obligation or if the plan asserts that the outstanding child support obligation is less
than the amount indicated in the records of DCSS. Refer to Bankruptcy Forms and
Procedures in the IV-D Environment, by Philip L. Strauss, (noted in the preface to
this outline) for the basis of this objection.
3. If current child support is mentioned at all in the plan, it will more than likely provide
for payment of child support outside of the plan. Most debtors will not contest the
continuation of an IDO for current support. However, the continued enforcement of
current support by IDO could possibly be a violation of the confirmation order. To be
safe, obtain consent from the Debtor's attorney, in writing, to continue collecting
current support only by IDO. Advise the employer to reduce any deductions to the
amount of current support only. The arrears will be paid through the bankruptcy plan
unless the plan expressly provides that arrears will be paid outside of the plan.
4. If the debtor fails to pay his current child support, file a Motion for Relief from the
Automatic Stay. All three districts in Georgia require electronic filing. In the
Northern District, the motion is accompanied by an Affidavit of Appearance of Child
Support Creditor, to avoid having to pay the filing fee, and a Notice of Hearing for the
clerk to use when they set the motion for hearing. The Notice of Hearing will be e-
mailed to you, and you must serve a copy of the notice on the Debtor, the debtor's
attorney and the trustee within three days of the date of the notice. You then file a
Certificate of Service with the Bankruptcy Court. In the Middle and Southern
Districts, it may not be necessary to file a Motion for Relief from the Automatic Stay.
As long as the IDO or garnishment is issued after the plan is confirmed (and is not
prohibited by the terms of the confirmed plan) and the IDO or garnishment does not
impact property which is “necessary” for the Chapter 13 Plan (i.e. the monthly
payments to the Trustee), then the automatic stay does not prohibit the action.
Telfair v. First Union Mortgage Corp., 216 F.3d 1333 (11th Cir. 2000).
5. At the hearing, the debtor's attorney will often announce "no opposition" to your
Motion for Relief. If the motion is heard, the relief is generally granted by the court.
(The Northern District will grant relief to allow you to pursue only post-petition
arrears). It will save a lot of time if you have a proposed order prepared, because
you can obtain the signatures of the debtor's attorney and the trustee the day of the
hearing, and leave the order with the calendar clerk for the judge to sign. Be sure to
attach a Distribution List to the order so that a copy of the order will be sent to you,
the debtor, his attorney, and the trustee (by local rule, a distribution list must be
attached to a proposed order in the Northern District of Georgia).
6. If the debtor is not paying the post-petition current support a Motion to Dismiss the
bankruptcy may be filed with the court.
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The Automatic Stay 11 U.S.C. §362
The filing of a bankruptcy petition under any chapter automatically stays most judicial
proceedings and any other collection activities against the Debtor, his property and
property of the bankrupt estate. This stay becomes effective as soon as the bankruptcy
petition is filed, whether or not any formal notice is given to the creditor. The stay
continues until the case is closed, dismissed, or a discharge is granted or denied, or as
to particular property, until that property is no longer property of the estate. As it relates
to child support, certain collection activities are exempted from the automatic stay. 11
U.S.C. § 362(b)(2). However, notwithstanding the exemption in 11 U.S.C. § 362(b)(2),
the terms of a confirmation order are binding on the debtor and all creditors. Most
Chapter 13 Plans will provide for the payment of outstanding child support. The
Eleventh Circuit has recently opined that efforts to collect outside the terms of the plan,
even if exempted from the automatic stay, violate the confirmation order and subjects
child support creditors to sanctions. You should therefore stop all enforcement actions
against the debtor, including but not limited to contempt, license suspension, tax
intercept, filing of liens, and garnishment, until the terms of the confirmed plan are
reviewed to determine what, if any actions, are authorized. If it is determined that these
collections activities are not permitted under the terms of the plan, then no enforcement
actions should be taken related to a pre-petition obligation until the bankruptcy is closed
or dismissed or relief from the stay has been granted.
Dischargeability 11 U.S.C. §§524, 727 and 1328(a)(2)
Discharge generally means that all of the debts listed in the Chapter 7 petition or
provided for by the Chapter 13 Plan are extinguished. However, child support or
alimony, which is due in connection with a court order, a governmental unit
determination, or a property settlement agreement, is not dischargeable.
Notwithstanding the express provisions of the Code, if a confirmed plan provides that
there is outstanding child support in an amount less than indicated in the Department’s
records and the plan indicates that child support will be satisfied in full, Department will
be barred by the terms of the plan from collecting any unpaid pre-petition child support
arrearage once the debtor receives a discharge.
11 U.S.C. §523(a)(5)).
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