I am faced with either foreclosure of a short sale for a home in Idaho. I actually now live in Arizona and have a moderate mortgage on a home, the Idaho property was built as an investement and we lived in it for 3years part time.My question is if the lender attempts to collect any deficiency from mehow is the best way to protect what I have. I currently have about $600,000 in Keogh an IRA accounts and get social security and a USAF pension.If a judgement is made against me what can they take? Would it make sense to pay of the mortgage in Arizona from my retirement investments or could they still take my house in Arizona?
State/Country relating to question: Idaho
In Idaho, a deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount that the underlying mortgage or deed of trust secures. Deficiency actions must be brought within 90 days after the foreclosure sale. Judgment cannot exceed the difference between the amount of the debt and the fair market value of the property. Costs and fees in filing the deficiency can also be recovered. Once a judgment is entered in Idaho, it can be "domesticated" or transferred to Arizona for collection. Therefore, the judgment in Idaho can be collected against you even if you are living in Arizona. (http://www.foreclosure.com/statelaw_ID.html#6)
As far as exemption from debt collection (http://www.nedap.org/hotline/exempt.html):
Under state and federal law, certain kinds of income and property are classified as exempt from debt collection. A creditor or debt collector cannot force you to use exempt income or property to pay a debt.
So it seems that if your pension is a VA Benefit, you are in good shape. If not, your pension seems all they can pursue.
If you receive PA or SSI, all of your earned income is exempt from debt collection. Earned income up to 30 times the minimum wage per week, after taxes, is exempt. The minimum wage is currently $7.25 an hour. If you take home $217.50 per week or less, all of your earned income is exempt from debt collection.
If you take home more than $217.50 per week, 90% of your gross income or 75% of your disposable income, whichever is greater, is exempt from debt collection.
Note that if they really want to get nasty, they can send a Marshall to take your personal property to satisfy the judgment.
As your retirement benefits are exempt, I wouldn't use them to pay any judgment. Wait and see what happens- and then negotiate with the Marshall if you have to. But don't overstep yourself. Wait until it happens. Not all lenders are pursuing judgments. Some lenders are just canceling the debt and forgetting about it- I've seen that about 50% of the time. So it may not even come to that.
Good luck. If you have more questions, please reply. Otherwise, kindly click the green "Accept" button. Best wishes.
18 years of experience.
Is my home in Arizona exempt?
Homestead in Arizona is exempt up to $100,000.00. Here's the link to the statute: http://homepages.law.asu.edu/~dkarjala/Property/ArizonaHomesteadProvisions.htm
Thank you for the accept, and thank you very much for the bonus. It's nice to know that we are appreciated!!
If you have more questions, please reply. Otherwise, I wish you the best.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).