[CLBS] Creditor Claim question

[Tyler McGee]

One argument would be that this is not dischargeable under 11 USC 523(a)(15), because the debt (indemnification right) is not a domestic support obligation and it is to a former spouse incurred by the debtor in the course of a divorce or in connection with a  divorce decree etc. Alternatively you might argue that if she does end up having to pay, any indemnification obligation wasn't part of the bankruptcy because the obligation only arose after filing.

Tyler J. McGee

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-----Original Message-----
From: CLBS [mailto:clbs-bounces at admws.idaho.gov] On Behalf Of Susan R. Wilson
Sent: Friday, July 12, 2013 10:32 AM
To: 'Ford Elsaesser'
Cc: 'clbs'
Subject: [CLBS] Creditor Claim question

I am sure this is a common scenario so the answer is probably pretty easy:

I have a an ex-wife with a decree stating the husband has the house and the responsibility for the loan. Decree says husband is to refinance the house within a year.  Husband never does that; wife has quitclaimed her interest to husband per the decree, but is still on the loan.  Husband defaults, bank forecloses.  During the foreclosure the husband files for Chapter 13 with a long list of creditors.  There likely will be a significant deficiency judgment, which the bank will go after ex-wife for.  Can ex-wife recover from husband?  Technically, wife's claim against husband will not arise until the bank goes after wife for the deficiency, which we won't know what is until after the foreclosure sale. Not sure if the bankruptcy will be done then and I suspect the bank will ask for a stay so they can proceed to foreclose.  Husband is letting the house go. Wife is not aware of any notice of trustee's sale - only the notice of default.  She can't afford the house but also can't afford a $30-$50k deficiency judgment and she doesn't want to file bankruptcy. . .

Any thoughts?

Susan


Susan R. Wilson
Attorney at Law, PLLC
208 S. Main St. Ste 2
Moscow, ID 83843
sw2 at moscow.com
208-882-8060
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