Generally speaking, a bankruptcy filing will not stay a criminal prosecution. However, there is case law in the Eastern District of North Carolina that provides as follows:
Bankruptcy proceedings have built-in protections for creditors who are owed monies. Therefore, creditors must work within the confines of the bankruptcy system if they believe they have been wronged by the debtor.
Once a debtor files a petition for bankruptcy, a disgruntled creditor may not then approach a governmental prosecutorial entity in order to prompt a criminal action to recover debt. If the creditor already has complained to authorities by the time a petition is filed, those authorities may commence or continue a criminal prosecution … as they see fit. But if the debtor files for bankruptcy before a creditor complains to prosecuting authorities, that complaint … may constitute a violation of the automatic stay or discharge injunction.
The most common fact pattern where this is applicable is with NSF checks. To the extent that a debtor in the Eastern District of North Carolina owes on an NSF check and it has not been reported to a prosecutorial entity at the time of the bankruptcy filing it is likely prudent to provide notice of the bankruptcy filing as quickly as possible to the creditor.
