In 1998 my husband allowed a vehicle in his name to be repossessed. The creditor was given possession of the vehicle, which they then sold at auction for far less than its value. We moved on with our lives thinking it would be a bad mark on his credit. Some time later a judgement was delivered to him for over $8,000 for the balance of the loan, even though he was no longer in possession of the vehicle. Last year he was served papers again- they refiled?! We are trying to refinance land purchased via owner financing in 2000 and were told they cannot give us a title policy due to the judgement against my husband. A friend in real estate says it may be illegal for the judgement to affect our physical property if it was filed on a personal property loan. What options & rights do we have?
In Texas, your homestead is exempt from seizure and the claims of most creditors. Liens that can attach to your homestead include purchase money liens, taxes on the property, work or material used in constructing improvements on the property provided the contract is in writing. There are several others. A judgment lien that resulted from a repossession is not among the others and would not be able to attach to your homestead. While the lien does not attach to your homestead, it does cloud title and makes selling or refinancing more involved. You can try to get a partial release of lien or do a HOMESTEAD AFFIDAVIT AS RELEASE OF JUDGMENT LIEN as provided by the Texas property code. You should contact an experienced real estate lawyer.
A judgment lien can be filed against property you own, if it's not exempt. It is common for car loan companies to repossess and then file a lawsuit against the balance of the debt. Your best bet is to settle so you can get your refi. Suggest 1/3rd of $8k, then settle for 50%. I bet you get it. You can even arrange for the settlement to be paid from the proceeds of the refi, if your refi lender will allow it.
Once a judgment has been issued to a creditor, even if it is for personal property, such as a car, the creditor becomes a judgment creditor and can seek to collect the judgment by different methods. One method is to file a lien against any property owned by the debtor. If the land you refer to is claimed as your homestead you may be able to remove the lien without making payment, because it is an exempt asset in Texas.
If the land is not your homestead, you will need to make arrangements to pay the balance owed, keep in mind you may now owe interest and collection costs in addition to the regular balance.
A final money judgment can be abstracted in any county where the judgment creditor thinks you own real property and the abstract is the equivalent of a lien. Such a lien is NOT illegal in Texas and relying on a friend for legal advice, no matter how well-intentioned, is seldom a good idea. Judgments can be renewed every 10 (really 12) years. What your husband was served with most recently was probably a new writ of execution, which renews the judgment for 10 (really 12) more years. Contact a lawyer. Dealing with judgment liens is not easy. Even if the judgment has expired, you still have to deal with the lien.
