Judgements and liens

[whtsamada]

Hello everyone. I have a couple of questions about judgements and liens. One of my creditors is threatening to sue. It is a credit union credit card with a very large balance on it (about $13,000). The debt is about three years old and I haven't made a payment on it in about a year and a half. I have other cards from that time as well, but none of them have been calling.

I am trying to avoid bankruptcy and am hoping to be able to wait the SOL out. My question is this. If they do sue and get a judgement against me I know they can put a lien on the house I own jointly with my husband. What happens if you file bankruptcy after a judgement? After a lien has already been put in place? Does the bankruptcy erase those or not? I'm afraid if I wait too long bankruptcy might not even be able to protect me.

I'm in Texas if that makes a difference.

Hope this post makes sense. Thanks!

[lrprn]

In Texas, the statute of limitations for credit card debt is four years - see http://www.fair-debt-collection.com/...-State.html#44 . Unfortunately the four years starts from the last payment so you've got 2.5 years to go to have the debt drop off that way.

What happens if you file bankruptcy after a judgement? After a lien has already been put in place? Does the bankruptcy erase those or not?

A lien placed on the house can be wiped out by filing bankruptcy. You do have to return to court after your bankruptcy is closed to file a motion to get the lien removed.

Frankly the better idea may well be to file bankruptcy now before the lien is attached to your home. If you don't mind me asking, why are you holding off filing now?

[CindyLou]

I don't think a creditor can file a lien against a home in Texas at all. (unless it's on more than10 acres in town or 200 acre's in the country and how many of those are there out there??? or unless its not the primary home)There is an unlimited homestead exemption in Texas. And there is NO wage garnishment at all. Unless you have large amounts of cash or luxury items you are probably judgement proof. Its not too difficult to be judgement proof in Texas. Not meaning they cant get a judgment, just meaning they cant get anything out of it.



Texas Homestead
The Texas homestead exemption is mandated by state Constitution. The homestead exemption value is unlimited. The exemption is limited to ten acres in a city or town.

Section 51 of Article XVI was amended effective 1/1/2000 the new section reads:

"The homestead, not in a town or city, shall consist of not more than two hundred acres of land, which may be in one or more parcels, with the improvements thereon; the homestead in a city, town or village, shall consist of lot or contiguous lots amounting to not more than 10 acres of land, together with any improvements on the land; provided, that the homestead in a city, town, or village shall be used for the purposes of a home, or as both an urban home and a place to exercise a calling or business, of the homestead claimant, whether a single adult person, or the head of a family; provided also, that any temporary renting of the homestead shall not change the character of the same, when no other homestead has been acquired; provided further that a release or refinance of an existing lien against a homestead as to a part of the homestead does not create an additional burden on the part of the homestead property that is unreleased or subject to the refinance, and a new lien is not invalid only for that reason."

Statute

[CindyLou]

Hmm...what happened to my post? It was here, now its gone? Here goes. I don't think lien can be filed on a house in Texas unless it's over 10 acres in the city or 200 acres in the country and there is NO wage garnishment at all in TEXAS. So it is really easy to be judgement proof. They can get a judgement against you but unless you have large amounts of cash or luxury items, in which case you would have probably paid your debt anyway, then they won't be able to do much. So I would just do the best you can and not worry about their threats. Texas is THE most debtor friendly state you can possibly live in.

Texas Homestead
The Texas homestead exemption is mandated by state Constitution. The homestead exemption value is unlimited. The exemption is limited to ten acres in a city or town.

Section 51 of Article XVI was amended effective 1/1/2000 the new section reads:

"The homestead, not in a town or city, shall consist of not more than two hundred acres of land, which may be in one or more parcels, with the improvements thereon; the homestead in a city, town or village, shall consist of lot or contiguous lots amounting to not more than 10 acres of land, together with any improvements on the land; provided, that the homestead in a city, town, or village shall be used for the purposes of a home, or as both an urban home and a place to exercise a calling or business, of the homestead claimant, whether a single adult person, or the head of a family; provided also, that any temporary renting of the homestead shall not change the character of the same, when no other homestead has been acquired; provided further that a release or refinance of an existing lien against a homestead as to a part of the homestead does not create an additional burden on the part of the homestead property that is unreleased or subject to the refinance, and a new lien is not invalid only for that reason."

Statute

[Granny]

Slight clarification to the above.

Liens can be filed against a homestead, they just can't do anything with the liens until the property is sold. A mechanic's lien can be filed against a homesteaded property, a tax lien can be filed against a homesteaded property. This is true even if the homestead is a house sitting on a city lot. The references to the acreage indicate how much acreage is exempted by the homestead. If the land exceeds those limits, they are not exempted by the homestead...and yes, there are plenty of ranches and farms that exceed those limits, especially in west Texas. Ya'll don't realize how big Texas really is.

Garnishments do happen in Texas too, but they are limited to taxes and child support.

Income tax refunds can be taken for child support, student loans and of course, taxes owed.

[JollyGG]

deleted post

[Granny]

Found it http://www.bkforum.com/showthread.php?t=15498

Could somebody move Cindy's post and my post back to here, it doesn't make sense in the thread noted above.

I wondered why Cindy was quoting Texas law in that thread. Now it makes sense.

[emoney]

While the SOL is four years for debts with only Texas roots, most cc aggrements have venue in South Dakota or other states that have statues that favor banks that have bought and paid for favorable laws.
Some state have a SOL of over ten years. Why do you think Citybank in located in South Dakota?
regards,
emoney

[lrprn]

Could somebody move Cindy's post and my post back to here, it doesn't make sense in the thread noted above.

I wondered why Cindy was quoting Texas law in that thread. Now it makes sense.

Done

[whtsamada]

Ok...thanks for the info! Just to clarify (this stuff confuses me!). If a lien is placed on the home before bankruptcy is filed we could have it removed through bankruptcy?

I was holding off on filing because I was hoping I would slip under the radar. I know, I'm like a kid hiding under a blanket from the boogeyman! I know so many people in my situation and none of them have ever been sued. It figures that I would be tho! ;) Right now we don't have spare cash for an attorney. We are expecting a child in October and finances have been really tight. I'm really not even sure how much lawyers charge, but I'm guessing it is several thousand dollars. I'm just trying to figure out what kind of time line I am working with.

[CindyLou]

I guess I should have clarified that I meant there are no wage garnishments at all for consumer debt. Sorry. And, yes, you are right there are very big homesteads in Texas but I guess if you have a home that big you can afford to sell it and pay the credit union your 6500 debt!!! oh, and thanks, moderator for moving the posts, I thought I was losing my mind for a minute there....

[Granny]

I guess I should have clarified that I meant there are no wage garnishments at all for consumer debt. Sorry. And, yes, you are right there are very big homesteads in Texas but I guess if you have a home that big you can afford to sell it and pay the credit union your 6500 debt!!! oh, and thanks, moderator for moving the posts, I thought I was losing my mind for a minute there....

Cindy,

I wasn't trying to nit-pick, but you ever know when someone will come in and read an old post, misunderstand and get unpleasantly surprised later.

And we could sell to pay a creditor, but why would we if we don't have too. I sure wouldn't.

[CityGirl]

If I have a state tax lien on my credit report for $700 will it be removed with BK?

[poorme]

No - the state tax lien won't be removed from your credit report because of the bk. It's probable, mostly likely, that the underlying tax also won't be discharged either.

[whtsamada]

So some liens are removeable and some are not?