[WSBARP] DOT Survived after BK

[Mike Zeno]

Eric--Speaking as Tim’s proxy, I will answer yes to your questions, with the exception that if the statute of limitations for foreclosing were to run shortly after the bankruptcy filing, the time to commence foreclosure would be extended until the automatic stay went away.  This typically occurs at discharge, which is usually only a few months after filing in a normal Chapter 7.

Mike

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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Eric Nelsen
Sent: Wednesday, March 4, 2026 3:30 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] DOT Survived after BK

If I can jump in and also ask Tim - Even though bankruptcy discharge blocks personal liability, would the statute of limitations still run on the debt in the ordinary fashion? So, if the S/L has passed on the underlying debt, could the Deed of Trust be cancelled by quiet title under RCW 7.28.300?

Anticipating this is a 30-year installment debt, let’s say the statute has run on 12 years’ worth of payments. Does that reduce the principal amount for which the DOT can still be foreclosed?

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

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 3:23 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto: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

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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 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
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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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