[WSBAPT] Question not related to probate- a Ch. 13 bankruptcy question

[Andrekita Silva]

  Law Office of
F.ANDREKITA SILVA
_______________________________________________________  
                                                            
February  14, 2023
 
Listserve,
 
I have a question unrelated to probate.
 
This is a bankruptcy question.
 
I know that divorce property settlement agreements are NOT  
dischargeable in Chapter 7 bankruptcy.
Based on my research, I understand PSA agreements in divorce cases ARE  
dischargeable in Ch. 13.
 
However, I am confused as to whether there are SOME  circumstances  
under which they can be discharged in Chapter 13.
 
I understand that an unsecured debt is non- dischargeable. In my case,  
the parties’ settlement agreement reached in mediation stated that H  
would refinance the home within 3-6 months to pay $165K to the wife  
for her interest in community property. If he did not refinance, then  
he was required to place the home on the market for sale at the 6  
month point. Wife was to receive a judgment. CR2A and final Decree  
said wife’s judgment would be paid from the proceeds of the sale of  
home. At the six month point, 12/26/2022, a judgment was entered in  
favor of wife. There was no deed of trust executed to secure the debt  
owed to wife. On 1/5/2023, H ordered to place the home for sale on or  
before 1/31/2023. The day before he was to do so, he filed Ch.13  
bankruptcy petition.
 
There should have been equity of $277K in home. After execution of  
CR2A in May 2022, real estate market began to drop. Now only $181K in  
equity- according to Zillow and King Cty Assessment (and bankruptcy  
schedule.)
 
Wife not given maintenance (10 year marriage)  as equity was done in  
property distribution.  A couple weeks after CR2A entered, H traded  
his 2020 truck for a 2022 truck, increasing debt on vehicle from $62K  
to $82K.
 
During divorce proceeding, H told W he would rather burn the house  
down than to give her a penny.  H will how keep the house, ALL  
personal property, a small trucking biz he started on the side, modest  
401k of $25K.  Although no one could foresee the housing decline  
starting in June 2022,  we believe H took deliberate steps to increase  
debt load, with advance plan to file Ch. 13.
 
Wife, a waitress earning $25K-$30K, will receive nothing if judgment  
discharged.
 
Does wife have any  remedy at all?

 Is a deed required to secure a judgment? Does language that judgment  
shall be paid from proceeds of sale create a secured interest?
Could either bankruptcy court or superior court entertain the question  
of whether the judgment were intended as a form of family support? 

 
 
andrekita
Law Office of F. Andrekita Silva
1325 Fourth Avenue, Suite 2000
Seattle, Washington 98101
206-224-8288
www.seattle-silvalaw.com[1]
 

 


Links:
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[1] http://www.seattle-silvalaw.com/

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