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The purpose of paragraph 11 was to protect Ms. Picou “from any
bad debt”; in particular, to protect Ms. Picou from sole personal
liability in the event that petitioner filed for bankruptcy and
Union Planters Bank sought recourse against her for the Lakewood
home mortgages. There was no subsequent modification to the
divorce decree.
As part of the divorce action, Ms. Picou delivered to
petitioner a quitclaim deed conveying all of her right, title, or
interest in and to the Lakewood home.
In July 1999, petitioner filed for bankruptcy under chapter
13 of the Bankruptcy Code and received a discharge in July 2004.
As part of the bankruptcy plan, the bankruptcy trustee garnished
petitioner’s wages and used the funds to pay petitioner’s debts,
including the mortgage payments to Union Planters Bank. The
bankruptcy trustee made mortgage payments of $13,176 and $11,780
in 2002 and 2003, respectively, to Union Planters Bank on behalf
of petitioner.3
In October 2005, petitioner refinanced the first and second
mortgages held by Union Planters Bank with another financial
institution, and he became the only borrower listed on the new
mortgage for the Lakewood home. The refinance extinguished any
3 Respondent does not dispute that the payments made by the
bankruptcy trustee constituted payments made by petitioner.
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Last modified: May 25, 2011