QUESTION
Is there a way to protect someone from having to pay judgment creditor?
Asked on Sep 08th, 2013 on Bankruptcy - Utah
More details to this question:
If an owner of real property obtains a reverse mortgage on her homestead property and receives part of mortgage proceeds in cash or monthly income payments from part of the mortgage. Can a certified judgment lien on her be subject to garnishment from the proceeds?
3 ANSWERS
Debt Collection Attorney serving Chicago, IL
Partner at
Edelman, Combs, Latturner & Goodwin, LLC
2 Awards
Other than the $4,000 "wildcard" exemption, I am unaware of any reason why a judgment cannot be enforced against the proceeds of a reverse mortgage.
Answered on Sep 12th, 2013 at 4:56 PM
Once the debtor has cash in a garnish able account, it can be garnished. Consult with an attorney for strategies to protect the money.
Answered on Sep 12th, 2013 at 4:56 PM
Chapter 7 Bankruptcy Attorney serving Salt Lake City, UT
at
Linda D. Smith, P.C.
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Based upon your facts I believe that the judgment creditor can go after the money and monthly income from a reverse mortgage. I say that because without the reverse mortgage in place what you have is equity in a home that a judgment creditor can lien and execute on to pay the judgment. You do have a homestead exemption of $30,000.00 for each person who is a titled owner and living in the home as their primary residence. If you claim your exemption then in my opinion the judgment creditor would have to know that there is equity above and beyond the exemption amounts. If you have a reverse mortgage I'm guessing the amount of equity is greater than the Utah homestead exemption. The way to stop this creditor would be to file for bankruptcy relief and the Chapter would depend upon how much equity, income you have etc.
Answered on Sep 12th, 2013 at 4:56 PM