Judgement debt discharged in BK...but attorney wants $10,500 to release judgement!

[tcreegan]

Hi PHX,

I will take a shot on the judgement/lien issue...

You and creditor go to court. Creditor proves you owe them X dollars. Court awards them a judgment, a legal document that states creditor went to court and proved you owe them X dollars. Thats it, they won, you lost, you owe them x dollars, court seal of approval.

But...the court doesn't collect any money from you. The creditor still has to collect the money you owe. Of course they already tried to collect, but they were pretty much limited to letters and annoying phone calls. Having the judgment opens up some heavy duty methods to collect their money:

Garnish wages...take a cut of your pay until they get paid back (without your permission)
Levy bank accounts....go get their money out of your bank (without your permission)
Liens against property....they get a document that says "if this property gets sold, creditor has to get paid"

Liens don't happen by magic or just b/c the creditor said so. Property deeds/titles are "recorded" (kept) by someone, usually the county clerk. Liens need to be recorded too, officially "attached" to the deed/title. This process might be referred to as "perfecting the lien" The process will vary state to state.

Confusion: the county recorder has "judgment" under your property instead of "lien
Possible answer: judgments get recorded too, put "on the record" so to speak. The county recorder may do both judgments and liens. Or maybe "judgment" is shorthand for "judgment lien"

Confusion: In AZ liens don't attach to primary residence unless equity is 150K+ (Des says) Yet title company says there is a lien preventing the sale.
Possible answer: ??? I was on a roll till I got here....how about getting a paper from the title company spelling out what exactly is the holdup, take that paper over to the county recorder and see how it compares to their records.

And now that I have slung enough mud on the judgement vs lien issue...

...how about an easy shot at attorneys for the creditor?

Charge the full amount to negate the judgment or release the lien. Illegal? no, audacious? yes
"It will follow you to your next property" Give em an "A" for effort and an "A" for creativity. This is complete BS and probably a violation of BK code. Absolutely cannot try to collect on debt discharged in a BK.
Lets play who's the plaintiff....original creditor hires local lawyer to file suit, local lawyer and/or orig. creditor farms judgment out to a bottom feeder debt collector. Find out who exactly was awarded the judgment, only deal with them.

...enough is enough....time to sign off..

Tom in Colo

[PHXDWTN]

Tcreegan: Thank your for the reply. I understand what you're saying about all the negatives about a lien...however since the debt has been discharged, they aren't owed any money so what would they put a garnishment and try to get? Or were you giving examples of what can happen BEFORE the BK discharge?

Their attorney straight out said that I don't owe them any money on the debt because the debt has been discharged but in order to record this with the Recorders Office, they want the $10,500. Again, no one has actually said there is a lien and I have a copy of the Judgment which doesn't say anything about a lien. The title company is saying the house can't be sold if there is a judgment on record for the deed holder.

Am I be able to post the judgment here for you guys to review?

[despritfreya]

My name is on the title however the mortgage is not, it is on my mother's name (her name is on the title as well). It is my primary residence. I am trying to get it removed because the title company said the house cannot be sold unless it's resolved.

Just plain BULL!

The fact that the loan that will be paid off (albeit short) is in your mom's name is irrelevant. The title company is insuring the title not payment to a lender. You need to move the escrow to First American Title.

The title is in your name with mom. You reside in the home. You listed the creditor on Schedule F. You listed the home on Schedule A. You declared an exemption under Title 33 Section 1101 of the Arizona Revised Statutes on Schedule C. No one objected to the exemption. You have a discharge.

Here is the law in Arizona - you should call the idiot at the title company and read it to her then tell her to go to the legal department and get the ok otherwise you will move the escrow to First American. . .

ARS 33-964 (in part) states:

A. . . . a judgment shall become a lien for a period of five years from the date it is given, on all real property of the judgment debtor except real property exempt from execution, including homestead property, in the county in which the judgment is recorded, whether the property is then owned by the judgment debtor or is later acquired. . .

B. Except as provided in section 33-1103, a recorded judgment shall not become a lien on any homestead property. Any person entitled to a homestead on real property as provided by law holds the homestead property free and clear of the judgment lien.

ARS 33-1103 (in part) states:

A. The homestead provided for in section 33-1101, subsection A is exempt from process and from sale under a judgment or lien, except. . .:

4. To the extent that a judgment or other lien may be satisfied from the equity of the debtor exceeding the homestead exemption under section 33-1101.

(Emphasis added.)

_________________________________

Sorry to sound so abrupt on this. I am not angry at you. I am pissed off at the incompetence I routinely seen at title companies. I cannot tell you how many times over the past 20 plus years I have had my clients pull escrows and go to FAT due to this very issue. What would be even more irritating is if you already are at FAT - please tell me you are not.

Des.

[despritfreya]

despritfreya. . .Would you mind checking this thread? I'm facing a "vacating"-issue, too..http://www.bkforum.com/showthread.ph...gment-after-BK

IB,

I cannot get to the post using the link. If you want, you can PM me.

Des.

[PHXDWTN]

DES: thanks you so much for all the advice. I will definitely contact the title company on Monday about it.

I would still like to get the judgment off my record so I will file the Motion to Dismiss Judgment with the Justice Court that it was originally filed with. Can you offer any advice on that? Should I file any supporting documents like the BK papers?

[daylate]

Des- even though this thread doesn't apply to my situation, I just want to commend you for your answers/comments, not only here, but throughout the forum. You are very generous with your time and I (and am sure many others) really appreciate your efforts to educate and help us.

[despritfreya]

Des- even though this thread doesn't apply to my situation, I just want to commend you for your answers/comments, not only here, but throughout the forum. You are very generous with your time and I (and am sure many others) really appreciate your efforts to educate and help us.

Daylate,

Thank you. As I have mentioned before, I get as much out of this forum as I give - probably even more. It is a mutually agreeable endeavor.

Des.

[despritfreya]

I would still like to get the judgment off my record so I will file the Motion to Dismiss Judgment with the Justice Court that it was originally filed with. Can you offer any advice on that? Should I file any supporting documents like the BK papers?

No, not really but I do agree that you would attach the bk info. (The front pages of the petition, Schedule F, the Master Mailing list, the 341 Notice and the Certificate of Service attached to the Notice showing the Notice was sent to the creditor, and the Discharge.)

Des.

[HHM]

Let's back up and ask a more fundamental question as I don't see it in any of the posts...

What was the judgment for, meaning, what was the nature of the underlying debt?

Another issue to clarify...does Arizona require the homeowner to actually "File" a homestead. If yes, did you "file" a homestead? In many states, the homestead exemption is not automatic, the homeowner must file a declaration of homestead to have a perfected homestead.

[despritfreya]

. . .does Arizona require the homeowner to actually "File" a homestead.

In AZ the homestead is automatic if you reside in the property unless you have more than one residential property.

Des.

[SunshineGal]

Hi PHXDWTN,

Title companies don't always play nice, I think it has to do with company policy and the fact the laws very from state to state where most of the actual title policy underwriters are national. Ask the Title Company about filing a homestead declaration, it may make them more comfortable allowing the sale to go through.

Good luck!
SG

[PHXDWTN]

Let's back up and ask a more fundamental question as I don't see it in any of the posts...

What was the judgment for, meaning, what was the nature of the underlying debt?

The underlying debt was for a credit card which wasn't paid. The account was sold to some Unifund CCR Partners who then attained an attorney to file the judgment.

Here is a copy of the judgment if it helps to answer any questions:

[HHM]

okay, then Desp's response is accurate then (I will defer to him on AZ law). I wanted to make sure we weren't dealing with some sort of priority debt judgment like HOA's debt.

Sounds like the title company is being fastidious and unreasonable.

[PHXDWTN]

Sorry about the "personally identifying" information, I've edited it all out...is it ok to repost the Judgment?

http://nitnelav.com/judgment1.jpg

http://nitnelav.com/judgment2.jpg

[AbbeyA]

First of all, there is a Judgment and there is a lien. The Judgment was handled in that it is $0. You don't remove filed papers, you file other papers that address the Judgment papers. The lien is a different animal. What did they lien?

Have you heard of pro se? Check the bk Courthouse for their procedures, then search for case history or on PACER attempt to find out about the lien process. It is difficult to get a lien off that is why I am so very much against allowing a Judgment to occur. If you sell the house, the lien must be satisfied. If you let it go back, the bank is stuck with it but I don't think it goes with the house in a repo. It could ride on your name. I'm not sure on this one. 'Hub

OK, I'm also totally confused. What do you mean by saying "it could ride on your name."? Are you saying that if a creditor has a judgment AND a lien on someone's property, even if that specific property is foreclosed on by the mortgage company, the lien can attach to future property of the debtor - in SPITE of the debt being discharged in bk? That doesn't make any sense. Am I reading into this?

I am also confused by the numerous times that I have seen people say to get the judgment vacated with the court, but now it seems that it's not really possible to do???

Again, thanks to everyone who spends so much time trying to explain things to us out here in cyberspace - you are truly appreciated by myself and so many others. Special thanks to Des and HHM and MsBKLawyer and AngelinaCatHub and AngelinaCat and all of the other moderators for all that you do.