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

[Ann Manley]

I tell my Chapter 13 clients that the non-filing ex-spouse could go back to
family law court and get the divorce decree adjusted - maybe adding in a
spousal maintenance payment since the property settlement isn't going to be
paid. I've never seen it happen, though. And the non-filing ex-spouse would
have to get relief from the automatic stay in order to proceed in family
law court.

Or maybe you could argue that the property settlement is actually in the
nature of support and so is non-dischargeable?

Ann Manley, Esq.
The Manley Law Firm, P.S., Inc.
PO Box 16324
Seattle, WA 98116
(206)292-3064 / (206)292-3914 fax
www.manleyfirm.com

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On Tue, Feb 14, 2023 at 10:32 PM Andrekita Silva <ak at seattle-silvalaw.com>
wrote:

> 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
>
>
>
>
>
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