Posted on: 08th Jun, 2011 02:23 am
Me and my husband are filing for divorce. Both of us own our primary property which I'm supposed to get. The property has still not been transferred in my name. But now my husband has defaulted on one of his loans and his creditors has filed a lawsuit. Will the creditor be able to file a lien on the property? If we sell off the property, then will his creditors be able to receive any proceeds from that?
Hi Ellie,
Your husband's name is still mentioned on the property deed. In such a situation, he will be considered as the owner of the property and his creditors can get a judgment against him and place a lien on the property. If you sell off the property when a lien is already placed on it, then the lien holder will come after you and your husband to recover the debts.
Take care.
Your husband's name is still mentioned on the property deed. In such a situation, he will be considered as the owner of the property and his creditors can get a judgment against him and place a lien on the property. If you sell off the property when a lien is already placed on it, then the lien holder will come after you and your husband to recover the debts.
Take care.
Also, when a lien is placed on a property, it has a position in line with other liens. So if your property had enough equity to cover your mortgages and any other lien or judgment filed against the property, those creditors would get paid. If there is no equity to cover the remaining liens, then they will attach to other assets you own.
I'll throw another scenario out to you, Ellie. This is something that you will want to discuss with your attorney and get a valid opinion about.
Usually, a transfer of title that precedes the awarding of a judgment to a creditor would be looked at as a fraudulent transfer, in that your husband could be accused of trying to avoid paying the forthcoming lien by transferring his ownership before the creditor had the chance to record its lien.
In this case, however, if part of your divorce settlement is for him to pass his ownership interest on to you, it would certainly not seem that they'd be able to consider it a fraudulent transfer.
So....what I'm saying is that you might be able to get past this potential hurdle and not be obligated for the lien that they'd wish to place.
Again...please check with your lawyer to get the skinny on this.
Usually, a transfer of title that precedes the awarding of a judgment to a creditor would be looked at as a fraudulent transfer, in that your husband could be accused of trying to avoid paying the forthcoming lien by transferring his ownership before the creditor had the chance to record its lien.
In this case, however, if part of your divorce settlement is for him to pass his ownership interest on to you, it would certainly not seem that they'd be able to consider it a fraudulent transfer.
So....what I'm saying is that you might be able to get past this potential hurdle and not be obligated for the lien that they'd wish to place.
Again...please check with your lawyer to get the skinny on this.
