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Almost bulletproof....

Posted by Ward-CA- on October 30, 2003 at 7:04 AM

In Reply to: judgement liens posted by phil - CA on October 29, 2003 at 11:25 PM

: Ward,

: How can buying judgement liens prove lucrative or fool-proof if the debtor already hasn't paid in 3+ years and we have such a rotten economy? They would just file a Ch. 7 or 13 for protection, right?

=?=?=?=?=?=?=?=?=?=?=

Phil,

Wrong.

To start, you'd get an abstract of the judgment (that was unchallenged beyond the deadline for appeal) from the issuing court. Then you'd take that Abstract of Judgment (AJ) and record it in the local county recorder's records.

After the AJ has been recorded for 90 days the bankruptcy court considers it a secured lien, and thus non-dischargeable in any subsequent bankruptcy action. Thus all a dumb judgment debtor would have accomplished is the expense and stain of bankruptcy against his credit record for the following 7 years. And in CA a court judgment is good for 10 years and renewable innumerable times.

You didn't bring up foreclosure, but a junior AJ would only be wiped off the title of the debtor's foreclosed property by a senior lien. It would still remain a lien against any other real property owned by the debtor in the county. If the debtor had no other property at that time the AJ would remain recorded in the public record and would attach to any subsequent real property bought in that county by the debtor.

So by avoiding the payment of the AJ the judgment debtor couldn't buy, refinance or resell his real property without paying off the judgment, which incurs annual interest of 10%.

Perhaps you'd now agree that buying judgments owed by property owners is fairly fool-proof, right?




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