California Court of Appeal

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In re Marriage of Walker, G050448

In an marriage dissolution proceeding involving the issue of whether one spouse is entitled to a greater share of the proceeds from the sale of a community property home due to her bankruptcy discharge, the trial court's award of a larger share to the spouse who received the bankruptcy discharge, on grounds that doing otherwise would enforce a discharged debt against her and thereby violate federal bankruptcy law, is reversed where: 1) this case features a secured debt on an asset jointly owned by the parties, the sale of which resulted in substantial proceeds beyond the amount of secured debt; 2) although a secured lender's potential right to a deficiency judgment (i.e., in personam liability) can be discharged in bankruptcy, the lender's lien on real property (i.e., in rem liability) is unaffected by a discharge in bankruptcy; 3) here, the lien was extinguished at closing by payment of the current amount owed on the loan, a necessary condition to selling the property and thereby benefitting both parties; and 4) under state law, the parties were entitled to equal shares of the proceed.

Appellate Information

  • Decided 09/29/2015
  • Published 09/29/2015

Judges

  • IKOLA

Court

  • California Court of Appeal

Counsel