[WSBARP] DOT Survived after BK

[Patrick McDonald]

Assuming the promissory note provided for 30 years of monthly installment payments (and we are still in the 30-year repayment term) and your client hasn’t made a payment in over 18 years, the unpaid installments that came due over six years ago should be outside the statute of limitations. As a result, the amount secured by the deed of trust should be quite small at this point, especially relative to the current value of the property. It’s not clear why the lender hasn’t foreclosed if it hasn’t been paid for 18 years. It sounds like you might have a very lucky client.

Patrick McDonald
___________________________
Pody & McDonald, PLLC
1000 Second Avenue, Ste. 1605
Seattle, WA 98104
T: 206-467-1559

From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Kevin Bukoskey
Sent: Wednesday, March 4, 2026 3:23 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] DOT Survived after BK

Okay, thanks Tim. So, basically, there is no way to remove the DOT from title or from the risk of future foreclosure? Even though it's been ~18 years since his last payment?

Kevin A. Bukoskey, Esq., JD, MBA
Attorney
GOURLEY LAW GROUP
THE EXCHANGE CONNECTION
SNOHOMISH ESCROW
P.O. Box 1091
Snohomish, WA 98291
PH:  (360) 568-5065 (800) 291-8401
Fax: (360) 568-8092

CONFIDENTIALITY NOTICE: This electronic mail transmission may contain legally privileged, confidential information belonging to the sender. The information is intended only for the use of the individual or entity named above. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution or taking any action based on the contents of this electronic mail is strictly prohibited. If you have received this electronic mail in error, please contact sender and delete all copies.
From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> on behalf of Timothy Steen <tsteen at andersonhunterlaw.com<mailto:tsteen at andersonhunterlaw.com>>
Date: Wednesday, March 4, 2026 at 3:08 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] DOT Survived after BK
Kevin,

A bankruptcy generally does not discharge a valid deed of trust, absent avoidance or similar special proceedings in the bankruptcy.  If the debtor received a discharge, that eliminates the debtor’s personal liability.  Meanwhile, the lender can still foreclose the trust lien to satisfy the indebtedness.  The client will likely have to handle the deed of trust as it would any other trust lien.

Thanks,

Tim

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Timothy E. Steen
Attorney | Anderson Hunter Law Firm
2707 Colby Avenue #1001 | Everett, WA  98201
P.  (425) 252-5161 | D.  (425) 303-3125 | F.  (425) 258-3345
tsteen at andersonhunterlaw.com<mailto:tsteen at andersonhunterlaw.com>| www.andersonhunterlaw.com<http://www.andersonhunterlaw.com/>

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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Kevin Bukoskey
Sent: Wednesday, March 4, 2026 2:40 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] DOT Survived after BK

Hi Listmates,

I have a new client who owns a property and had a Note/DOT. During “The Great Recession”, he claimed BK, included the loan, and never made any payments again and has not heard anything back from the lender either way.

Recently, he pulled a title report, and it seems that the DOT survived and was not stripped in the BK.

When this happens, from a title standpoint, would you expect a quiet title to remove the DOT, or is this something that has to be done via a court order in BK court?

Thanks.

Kevin A. Bukoskey, Esq., JD, MBA
Attorney
GOURLEY LAW GROUP
THE EXCHANGE CONNECTION
SNOHOMISH ESCROW
P.O. Box 1091
Snohomish, WA 98291
PH:  (360) 568-5065 (800) 291-8401
Fax: (360) 568-8092

CONFIDENTIALITY NOTICE: This electronic mail transmission may contain legally privileged, confidential information belonging to the sender. The information is intended only for the use of the individual or entity named above. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution or taking any action based on the contents of this electronic mail is strictly prohibited. If you have received this electronic mail in error, please contact sender and delete all copies.
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