Family Law Obligations Secured by Consensual Liens
Key Points
  • Family law and bankruptcy law often go hand in hand when you are faced with a divorce.
  • Family law obligations should be secured in light of a bankruptcy. Make sure you seek advice of a competent family law attorney who is also familiar with bankruptcy.

Before Farrey v. Sanderfoot gave protection from avoidance to most family law judgment liens, some family law practitioners may have obtained deeds of trust to secure their clients’ obligations to prevent them from being avoided under 522(f)(1)(A).

A recent Ninth Circuit bankruptcy appellate panel decision, however, should alert practitioners to the fact that this practice is not without its own risks. In re DiSalvo, 221 B.R. 769 (Bankr. 9th Cir. 1997). In DiSalvo, the spouse ignored the deed of trust and executed her family law judgment on other property of the debtor spouse. The bankruptcy court held that the creditor spouse had violated the one form of action rule, Cal. Civ. Proc. Code 726(a), and had not only waived her security but also extinguished her entire claim.

The bankruptcy appellate panel affirmed the lower court’s decision that the one form of action rule applied to this type of deed of trust and that the creditor spouse had violated the rule and had thereby lost her security. However, the panel reversed the ruling that the creditor spouse had extinguished her claim, concluding that this sanction was too harsh.

Useful Online Tools

Suggested Reading
Divorce & Money: How to Make the Best Financial Decisions
This book is a practical guide to evaluating assets during divorce. It explains how to determine the real value of marital property including houses, businesses, retirement plans and investments and how to negotiate a settlement that is fair to both sides.

Authors: Violet Woodhouse & Dale Fetherling

Related Article Archives
Financial Planning & Divorce
Property & Debt Division
Property Valuations
Premarital Agreements
Tax Aspects
    All Article Archives

Related Categories
Alimony & Spousal Support
Divorce, Dollars & Debt
Estate Planning & Divorce
Insurance & Divorce
Taxes & Divorce
    All Categories
Related Forums
Financial Aspects
Property & Debt
Spousal Support
Tax Aspects
    All Forums

Resources & Tools

Bookstore Promotion Discount

Start Your Divorce Online Start Your Divorce
Several Options to Get Started Today.
Divorce Tools Online Divorce Tools
Keeping it Simple to Get the Job Done.
Divorce Downloads Download Center
Instantly Download Books, Guides & Forms.
Divorce and Custody Books Discount Books
Over 100 of the Best Divorce & Custody Books.
Negotiate Online Negotiate Online
Settle your Divorce and Save.
Custody and Support Tracking Custody Scheduling
Make Sure You Document Everything.
ADVANTAGES OF BANKRUPTCY -- Bankruptcy before divorce makes it clear how debts will be handled. That makes it easier to divide marital property.
Start Divorce

Easily Connect With a Lawyer or Mediator
Have Divorce Professionals from Your Area Contact You!
Enter Your Zip Code:


Featured Book Divorce & Money: How to Make the Best Financial Decisions

Divorce & Money: How to Make the Best Financial Decisions

Divorce & Money: How to Make the Best Financial Decisions


Featured Download The Effects of Bankruptcy During Divorce

The Effects of Bankruptcy During Divorce

The Effects of Bankruptcy During Divorce

Start Reaching Potential Clients Through Divorce Source. Learn More

Guarantee Official PayPal Seal Facebook Twitter Versign Secure Site