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<p>Law Office of<br>
<strong>F.ANDREKITA SILVA</strong><br>
<strong>_______________________________________________________ </strong><br>
<br>
February 14, 2023<br>
<br>
Listserve,<br>
<br>
I have a question unrelated to probate.<br>
<br>
This is a bankruptcy question.<br>
<br>
I know that divorce property settlement agreements are NOT dischargeable in Chapter 7 bankruptcy.<br>
Based on my research, I understand PSA agreements in divorce cases ARE dischargeable in Ch. 13.<br>
<br>
However, I am confused as to whether there are SOME circumstances under which they can be discharged in Chapter 13.<br>
<br>
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.<br>
<br>
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.)<br>
<br>
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.<br>
<br>
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.<br>
<br>
Wife, a waitress earning $25K-$30K, will receive nothing if judgment discharged.<br>
<br>
Does wife have any remedy at all?<br>
<br>
Is a deed required to secure a judgment? Does language that judgment shall be paid from proceeds of sale create a secured interest?<br>
Could either bankruptcy court or superior court entertain the question of whether the judgment were intended as a form of family support? <br>
<br>
<br>
<br>
andrekita<br>
Law Office of F. Andrekita Silva<br>
1325 Fourth Avenue, Suite 2000<br>
Seattle, Washington 98101<br>
206-224-8288<br>
<a href="http://www.seattle-silvalaw.com/">www.seattle-silvalaw.com</a><br>
<br>
<br>
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