[WSBARP] Taking Title Subject to Lien

[Jeff Davis]

I have a related question.  Default judgment is entered against Debtor.
Judgment is not recorded and Debtors files chapter 7.  There is a little
equity above the homestead amount, but trustee still files report of no
assets.  The debt will be discharged.  However, the judgment lien cannot be
avoided under 522(f).  What happens to the judgment lien after the case is
closed?

 

Jeff Davis

 

From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>
On Behalf Of Dwight Bickel
Sent: Tuesday, September 29, 2020 12:23 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Taking Title Subject to Lien

 

Upon acquisition of ownership, the judgment will automatically attach as a
lien to non-homestead real property. 

 

Often a purchaser chooses not to pay off a prior judgment at the time of
closing. A purchaser has the right to delay, sometimes hoping the creditor
will never enforce the judgment and eventually the judgment expires as a
lien. The judgment creditor usually has no knowledge that real property has
been acquired.

 

If there is a purchase money loan, the title company can insure the new
purchase-money lien is superior, and remove the judgment as an exception to
that loan policy. The judgment will be an exception on the owner's title
insurance policy. 

 

However, the judgment creditor can quickly begin execution proceedings
against that property. There is a rule in equity that the creditor is
required to first pursue other collection first, resorting to a Sheriff's
sale of real property only if required for collection.

 

Dwight A. Bickel

Washington Title Professional

dwightbickel at hotmail.com <mailto:dwightbickel at hotmail.com> 

www.linkedin.com/in/dwightbickel <http://www.linkedin.com/in/dwightbickel> 

http:/www.titleadvisor.com

206-484-1976 

 

 

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