Do Judgment Liens Attach to Inherited Property?
We recently helped a client who inherited her mom’s house when mom passed. The problem was that she inherited the house with her brother, and her brother had a judgment against him from unpaid credit card debt. The siblings wanted to sell the house, but were unable to do so because of the brother’s unpaid credit card judgment debt.
In this case, we were able to help the siblings sell the house by negotiating the debt based on the proceeds from closing but there could have been other ways to resolve the outstanding judgment lien.
Before we provide solutions, in order to attach to the property, the judgment must be certified and recorded in the county where the property is located. To find if the judgment has been certified and recorded, look for two things: a stamp by the County Clerk of Court, and two recording stamps. There are other issues in determining whether a judgment lien has attached. You can find more information here.
One misconception is that, because the judgment is against one sibling and both inherited the property, that the judgment may not affect the property – this is false. Only married couples can avoid a lien against the property if the judgment is in the name of one spouse.
In our case, we were able to help the siblings negotiate for two reasons: first, the judgment lien was against only one of them – so we were able to argue to the creditor that they would be unable to get 1/2 the house. While this may be true from a practical perspective, it was largely a bluff. Although the siblings each owned an undivided 1/2 interest in the house, the judgment lien attaches to the whole house. If the creditor had foreclosed, they would have been paid from the foreclosure and the sister would have a claim to any surplus or excess proceeds. Second, we used some of the brother’s proceeds from the sale to pay off creditor at a discount. We convinced the creditor that something now was better than nothing for the forseeable future.
The only other ways we know of to eliminate the debt?
- Pay it off in full.
- Establish the home as brother’s homestead, making the house exempt under FL law (in our case, both siblings lived outside of Florida, so there was no way to claim the house as homestead).
- Partition the home, taking the amount of the judgment lien from the brother’s half (which is essentially what we did, but without the fight of a partition lawsuit).
If you have problems with judgment liens attaching to your property, please subscribe to the Crushing Debt Podcast, on iTunes, Stitcher, and GooglePlay. If you prefer, please contact us to schedule a free initial consultation to discuss your options at 727-261-0224 or email me directly at firstname.lastname@example.org.
Shawn M. Yesner, Esq., is the host of the Crushing Debt Podcast and founder of Yesner Law, P.L., a Tampa-based boutique real estate and consumer law firm that helps clients eliminate the financial bullies in their lives. We assist clients with asset protection, the sale and purchase of real property, Chapter 7 liquidation, Chapter 13 reorganization, bankruptcy, foreclosure defense, debt settlement, landlord/tenant issues, short sales, and loan modifications in Tampa, Westchase, Odessa, Oldsmar, Palm Harbor, Clearwater, Pinellas Park, Largo, St. Petersburg, and throughout the greater Tampa Bay area.