Arbitration And Bankruptcy

If for example I have an ongoing judgment against me--a bank levy, meaning okay, money is being taken out of my bank account until such time as my debts are satisfied--but what if I file bankruptcy?

It sounds like a potentially complicated case...that maybe only a lawyer can answer... I wonder from which court do bank levy judgments come from because I am not sure if it will hold power over the bankruptcy court. Logic dictates though, that if the consumer's "issue" is included in the core proceedings of the bankruptcy court, then it should hold power over everything else? Unless of course the "issue" is excluded from the bankruptcy court proceeding as in the case of a consumer trying to get out of alimony or child support obligations via bankruptcy's automatic stay...

Were you trying to ask if the automatic stay can actually stop the bank levy?

Yes I think and also, if  my creditors/lenders have received notice of my bankruptcy petition, would they continue to to levy my account? What happens to the automatic stay?

Mhmm. I think the automatic stay, stays. If the bank continues to withdraw from your account, they'd be in violation of the automatic stay provision

We really need a bankruptcy lawyer for this but for discussion's sake...

So you, the debtor found out that the creditor violated your rights, while you are inside of the bankruptcy proceedings, what would you do? Are you going to let them continue withdrawing from your account or inform the bankruptcy court? In which case, I mean if you inform the bankruptcy court, it would (I'm not sure) ask you to file a case against the creditor (I don't know what exactly), perhaps a kind of putative class action (if it is certified or proven that it is a common wrong) so as to stop it from levying your account.

The arbitration (a separate trial) comes in now, as the creditors would, to avoid punishment, file a kind of a motion to stop or stay the litigation. These are all happening inside the bankruptcy forum. The bankruptcy court has to rule on whether or not to punish the creditor for violation of the stay or allow a separate trial, outside of the bankruptcy court, for the creditor and the debtor to fix the complication.

If the bankruptcy court denies the creditor's motion to stay the litigation, and then the district court affirms the decision, the debtor should not celebrate yet, because the creditor can take it up to the circuit courts. I've read cases in which the circuit courts ruled in favor of arbitration.

The circuit court? How many courts are there? This is discouraging me from filing bankruptcy and just let the situation as it is..but thank you all for the insights. I was hoping filing bankruptcy would save me from the levy via that automatic stay provision. You know how hard it is to not be able to withdraw from your own account but to have the checks that you issued prior to the judgment bounce too...is just terribly inconvenient and embarrassing.

The circuit court is also sometimes referred to as the court of appeals or a review court. Meaning that the case has gone through the lower hearings, and upon failure to reach a unified resolution, found itself in what you may consider a higher court.

I share everybody's sentiment of needing a lawyer in here because when arbitration law collides with bankruptcy law it usually spells "spider web." It just is inherently complicated.

Anyway, under the FAA or Federal Arbitration Act the following are what should compel a court to allow arbitration:

(1) whether the parties agreed to arbitrate; (2) whether the dispute falls within the scope of their arbitration clause;
(3) if federal statutory claims are raised, whether Congress intended those claims to be arbitrable; and
(4) if the court concludes that some but not all of the claims are arbitrable, whether it should stay the non-arbitrable claims pending the conclusion of the arbitrtration.

I have also read a case like yours in which the bankruptcy court ruled non-arbitration but the circuit courts reversed that ruling and in the end, the case went into arbitration.

I am beginning to really dislike the thought of using bankruptcy for this post-judgment situation. I don't think I can go through with it.

Does anybody have any suggestion as to how I can better deal with the bank levy? And thank you again, everybody, for the input. Much appreciated

You can try to negotiate with your judgment creditor...perhaps trade in the levy for wage garnishment?