Legal Question in Family Law in California

Hello,

1. Divorce decree specifies that when the home is sold the proceeds will be split 50/50. Husband and wife are both on the deed.

2. Husband left home seven years ago

3. Mother still lives in the home with 2 minor children

4. Wife is eligible and she filed for Chapter 7 bankruptcy.

5. Wife is a Homesteader and she claimed Homestead Exemption

6. Husband is NOT a Homesteader and he wouldn't be eligible to file and claim Homestead Exemption had he filed first.

The problem and the question:

Assuming the house is sold by the trustee and there are proceeds from the sale:

1. Does the wife receive 100% of the proceeds because she filed chapter 7 and she is the only one eligible for homestead exemption?

OR

2. Are the proceeds split 50/50 because the husband is on the deed AND because the divorce decree specifies split ?

What weighs more? The later right to receive Homestead Exemption, or the previous court order saying that proceeds are split 50/50?

Thank you


Asked on 3/29/23, 6:29 pm

1 Answer from Attorneys
PATRICK MCCRARY PATRICK MCCRARY

The divorce decree (Dissolution Judgment) divided the interest of the two of you equally. The fact that the change of ownership is was not recorded at the county recorder does not change the fact that the house belongs to the two of you and, when sold, the proceeds are divided 50/50. Recording is ony more notice to 3rd parties. I assume, without looking at the judgment, that would mean the net proceeds are divided 50/50 after payment of liens, existing at the time of the judgment. When filing in bankruptcy the wife's interest that could be transferred to the trustee is only the interest that she held, pursuant to the judgment. If the trustee sold the home, which is unusual, your wife's debts would be paid from her share. Those are the normal provisions of the family law judgment and certainly there can be some deviations. If you would send me a copy of the judgment it would take me 5 minutes to tell you if there is any change in the result that I have explained. Pat McCrary

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Answered on 3/30/23, 7:19 am


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