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If debt holders do not reveal themselves, it is to their detriment because if they are holding nothing more than the debt and no judgment has been obtained against you, there is no way that the title company will be able to pick these jup. The result to the debt holders is that they will not have the opportunity to be paid from the sale proceeds and they will thereafter not be able to tap into any of your retirement benefits because State and Federal law exempts Social Security benefits, IRA's, Pensions and other retirement accounts from being used by creditors (Or, as you call them, "debt holders" ) to satisfy the debts they hold,
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If a bank that obtained judgment against a debtor and then sells the debt to a debt buyer must the debt buyer obtain additional judgment against the debtor? In New York State what is the statute of limitations for the debt buyer to obtain judgment, if necessary?
Good morning, Gerald,
If the original creditor (bank) obtained a judgment against the debtor, the lender can sell the judgment debt and the new judgment creditor can execute on the judgment to satisfy it without suing the debtor again to get another judgment,
FOR ANDREA ONLY
It is my understanding that creditors who have judgment against a debtor will be somehow aware that the debtor has a home closing. Under New York State law a pensioner is entitled to a certain amount of home equity according to the county where he/she lives. I am aware of this part of Civil Practice Law and Rules. I want to be certain that if judgment creditors are not present at the closing do they default their rights to collect their share of the proceeds in the future?
Hi, Gerald, Thank you for requesting me,
Here is what happens: When a creditor sues a debtor and obtains a judgment against the debtor, he is known as the Judgment Creditor and his judgment against the debtor is a matter of public record. When the seller sells his house, the buyer orders a title report from a title company of his choice which will also conduct the closing and will insure title free and clear in the buyer. The title report consists of, among other things, a title search and a judgment lien search and will include all judgment son the public record which are against the seller and the buyer. These matters must be cleared up (Paid) so that the seller can convey title to the buyer, free and clear of all judgments, mortgages, liens and other encumbrances. By the same token, any judgments which appear against the buyer must also be cleared up so that his mortgagee is assured of first lien position. The title company orchestrates the closing, collects the buyer's loan proceeds, pays off everything appearing of record and the balance goes to the seller. If the seller's creditors have not sued the seller and do not have a judgment against him, then the title company will have no way of knowing what the seller owes and to whom. The title company's job is to clear those matters appearing as a matter of public record and this is a good opportunity for the seller's creditors to be paid. If the seller's creditors have no judgment appearing on the public records, they miss this opportunity to be paid, but they can still seek payment from the seller, if they sue the seller before the expiration of the Statute of Limitations. Once they have their judgment, they can enforce the judgment against the seller's assets, except for any Social Security benefits, IRA's, Pensions and other retirement benefits received by the seller. New York judgments are good for 20 years,
for andrea only
If the seller has creditor judgments can the money owed be paid at the time of the closing? The buyer would present a certified check which would go into the seller checking account before the close of bank hours on the day of the closing. As long as the judgments against the seller is much less than the proceeds of the closing minus cost, for example, real estate broker fees. everything should be cleared. Please remember that the buyer has to make a deposit to the seller which will be held by the seller lawyer. If the buyer defaults on payment the deposit in most cases will be transferred to the seller. Also, in the case of a cooperative the cooperative board has to determine if the buyer is credit worthy and of good moral character.
Is the above described arrangement possible?
In the situation you described, judgment creditors are paid at the time of closing. While it is true that the buyer must make a "Good Faith Deposit" when he submits his offer to the seller through the real estate agent, the proceeds of the buyer's purchase money loan is sent to the title company by the buyer's lender and it is the title company that disburses the funds at the closing, issuing checks to judgment creditors, paying the various fees involved and then gives the seller the balance of the sale proceeds,
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