Lein and Homestead Exemption

[woeisme]

Ok, so I know I'm just borrowing trouble here, but since there are so many smart people on this board, I thought I'd ask if anyone knows what might happen in the following hypothetical situation.

My brother has a ton of debt, but having no assets and living off of disability payments from SSI, has been pretty much collection-proof for the past dozen years or so. Creditors call and harass him all the time, and have even been calling my siblings and I, but pretty much we tell them when they call "not our problem, maybe you shouldn't have issued your credit card to someone with no income or assets." (I don't think what he's doing is right, but if they can't look at his trashed credit and see he's a bad risk, then I don't feel particularly sorry for them either.)

Anyhow, our Mother passed away and we just finished probate, and the house she and he were living in is now partially his, so the asset situation has changed. The house is falling apart and appraised at 45K but realistically selling "as is" he could maybe get 25-30K for it, and the state he lives in has a 25K homestead exemption. And he only owns 1/6 of the house, so even at the appraised value of 45K, he only would get 7.5K, well under the homestead exemption.

My question, could a creditor put a lien on the home, even though my brother's interest in the home is well under the homestead exemption? We're actually hoping to do a real quick sale to a neighbor before his creditors even find out he is part-owner, but if that falls through and we have to take some time to find another buyer, a concern is that a creditor will slap a lien on it, and he's been pretty stubborn about refusing to do CH 7 so I don't know if we'll be able to talk him into filing to get a lien removed, since realistically it would cost him about as much to get a lawyer and file as he'll get in proceeds from the sale, so what does he care that it can never be sold (and the others with part interest in the house can never get out from under it either... he can be a real jerk that way.)

So my question is, would a judge approve a lien if a creditor has a judgement, if the lien is for a home that's proceeds would be exempt if liquidated?

Thanks for any thoughts you might have on the topic.

[brokehmowner]

I'm a newbie here, so you can take this with a grain of salt. But when my Mother passed away there were 7 of us children left. My brother had several judgments against him which he didn't even think about (he hadn't worked in years, in and out of jail, drug rehab). Some of them were for doctor/hospital bills for which he received a settlement but did not pay them.

Anyway, no one thought anything about these judgments as we had the house up for sale, and got close to closing. Then when the Hud1's were sent, the judgments were discovered. They were taken out of his proceeds before he received the check. I'm foggy on whether he had to sign anything for this to move forward or not.

[AngelinaCat]

If we knew what state he lives in that would help us formulate answers.

It is my understanding that here in Florida, everyone who has an 'interest' in the property has to sign some sort of document, stating whether you are 'in' or 'out'. I am foggy on that as well. I do know there was a grand old home here in our little town that fell into disrepair over ten years while the heirs squabbled over it. Fortunately for the home, the estate was settled and the house sold before it was totally unsalvageable.

It is reading scenarios like this--and dealing with my Mother's Brother during her last illness--that makes me extremely grateful to have been an only child.

[brokehmowner]

Woeisme, I did ask my sister if she remembered what happened. She said that because he had already signed off on the sale of the house, there was no need to get his permission to dock his proceeds. She said that would have been like having to get permission to garnish your wages. However, she did remember that the real estate agent had asked the remaining six of us if we wanted that to come off the top, before divying up the proceeds, or if we wanted it to all come out of his. She remembered this because she actually blurted out to the agent "why would I want to do that"???

[woeisme]

Thanks everyone, I appreciate the help. The house is in Ohio, but it sounds like on here that only his portion would be docked from what you all have posted. Our concern was that we wouldn't be able to sell until the liens were satisfied first, since you can't transfer the title without settling the lien, but if all that happens is that his 1/6 of the sale proceeds gets docked by his creditors, that's a relief. It'd be a shame since he's got the most limited means of any of us (get a little over $1000/month in disability pay) but he's the one that dug himself into this hole despite living expense-free for the past 12+ years mooching off my Mom before she passed away (she paid all housing expenses, all food except when he'd go eat out on his own, utilities, you name it, she even bought him 3 different cars and paid the insurance on them) so the fact that he's totally broke now and deep in debt is a mystery to me since he had maybe $200/month in medications and Medicaid co-pays so the other $800+/month was discretionary spending. I work 60 hours a week and wish I had that much play in my budget! But he's going to have a real tough time adjusting now that he's got to pay his own way, so I do feel a little sorry for him.

[AngelinaCat]

Dear woeisme: do NOT feel sorry for your brother; he made his choices, and now he is going to have to suffer the consequences. Some people never grow up.