§68.07 Impact of Bankruptcy On Enforceability

• Jurisdiction: Washington

§ 68.07 IMPACT OF BANKRUPTCY ON ENFORCEABILITY

In prior case law, a divorced spouse could avoid a lien created in a divorce action through the bankruptcy process. In re Pederson, 875 F.2d 781 (9th Cir. 1989); In re Galvan, 110 B.R. 446 (9th Cir. BAP 1990). 11 U.S.C. § 522(f)(1)(A) was amended to provide that a judicial lien securing an alimony or child support obligation cannot be avoided when it would impair an exemption. Normally, a judicial lien can be avoided by a debtor to the extent that it would impair an exemption, such as a homestead exemption. However, this does not apply in the situation in which the obligation has been assigned to a third party, such as the state.

In Farrey v. Sanderfoot, 500 U.S. 291, 111 S. Ct. 1825, 114 L. Ed. 2d 337 (1991), the Supreme Court held that a Chapter 7 debtor could not avoid a judicial lien against real estate in favor of a former spouse pursuant to a divorce decree...