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Ray
Ray, Lawyer
Category: Real Estate Law
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Experience:  Texas Attorney for 30 years dealing in real estate
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Regarding Hawaii property, tenancy in common. There is no

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Regarding Hawaii property, tenancy in common. There is no mortgage (paid off) on this property.
Siblings 1, 2, & 3 (along with their families), live on this property.
Sibling 1, with his wife, incurred a lien from his own foreclosure on a separate property.
Sibling 4 wants to be released from this property because the lien on Sibling 1 is affecting her credit.
- Is this possible? What do we need to do to take sibling 4 off?
- What about Sibling 1, can he be taken off so that his lien does not affect the property? In the hopes that his lien will be attached to he and his wife.
- Ideally, if everyone agrees, Will a quit claim deed process work?

RayAnswers :

Thanks for your questions and good day to you.Let's go through them.

RayAnswers :

A judgment lien against the property will remain until it is paid off.That said any sibling can quitclaim their interest to the others.and be off the property.The remaining owners will still have a tenancy in common with a lien on it.

RayAnswers :

The quit claim will transfer ownership here , it will not release the lien if it has been attached to the property.

RayAnswers :

This is as close to a quitclaim form premade that exists.

RayAnswers :

Please let me know if you have follow up here.Sibling one can use a quitclaim to transfer their interest to the others.

RayAnswers :

If their is a judgment lien on the property it will remain on the property and the remaining owners would have to resolve it in order to sell it .The creditor may be able to force sale of it and claim the interest belonging to Sibling one.

RayAnswers :

Again let me know here if you have more follow up.It is not a problem.Thanks for letting me help you.

Customer:

So, there is no way for the property to be released of this lien, even though the lien was incurred by sibling 1 and his wife.

RayAnswers :

It also would be possible for all of you to sell the property and use Sibling ones share to pay off the lien.The lien here would be paid off as part of the sale.Otherwise a lien against the property remains until paid.

RayAnswers :

Thats the only way to release the lien so that it can be sold.A quitclaim here if it had been done before the lien would have worked to protect it.

Customer:

What if a quit claim is done by all four to put the ownership to Mom as sole owner. And sibling 1 was to claim bankruptcy to take care of his debt. Will this work? Does the debt not following sibling 1?

RayAnswers :

Sibling one would be at risk here for the bankruptcy trustee claiming fraud and dismissing his filing.

RayAnswers :

The lien if it has been attached to the property clouds title here--prevents a sale by whoever is the owner until paid.

RayAnswers :

You cannot quitclaim around a lien here unfortunately.

RayAnswers :

Your best option would be to sell it and use his share to pay off the judgment lien.

RayAnswers :

Not sure if that is possible but its an option to get rid of lien.

RayAnswers :

He could then file bankruptcy.

RayAnswers :

But he would not necessarily have to unless there were other debts.

RayAnswers :

If you pay off the lien here it might save him from bankruptcy.

RayAnswers :

It would be possible for a escrow agent to hold his share to pay off the judgment.

RayAnswers :

And the others would be able to save their credit and get their share at least.

RayAnswers :

And it might be possible here to negotiate a reduced payout with creditor and a release.

Customer:

Okay . . . that means all those living in the house will be evicted, due to that one sibling. Most likely its like saying the remaining three "buy" his share out for the amount of the lien.

RayAnswers :

They could then buy property with their funds from the sale.

RayAnswers :

I know its hard but the sibling here really did it to the others when he incurred the judgment.

RayAnswers :

It really is unfortunate here, the perils of joint ownership.I wish I could tell you otherwise.

RayAnswers :

Long term it is important for all the siblings to force payment of the judgment because it hurts the innocent here.

RayAnswers :

Thanks for letting me help you,I wish you the best here in a tough situation.

Customer:

Here's another curve ball. Sibling 4 had already filed bankruptcy of her own, which means she did not disclose her ownership on the property, which constitutes fraud. Does this also mean that she had automatically relinquished her interest in the property when she did this?

RayAnswers :

I am here if you have more follow up.I know this is problematic for all of you.

RayAnswers :

Yes this might be fraud but if she was discharged it may go unnoticed.

RayAnswers :

Butt yes it is on her here to disclose it when she filed.

RayAnswers :

She did not relinquish the interest because it was not listed as an asset.It should have gone to the creditors---her interest at least.Thats terrible for the others who are burdened with this.

Customer:

siblings 2 & 3 are subject buying out sibling 1. Will we need to "buy out" sibling 4 also or if this is brought to court, will disclosure of this information help reduce the amount of "buy out"?

RayAnswers :

Sibling one here can sell out and quitclaim their interest.Thats one part here.

RayAnswers :

You would still have to resolve the judgment here to get rid of the lien, if you guys buy out the other sibling the funds go to pay off the lienholder and get a release here.

RayAnswers :

Honestly if this was discharged here the bankruptcy likely would be done and not reopened.Unless a creditor did so and realistically that probably would not happen at this point.

RayAnswers :

This judgment lien will continue to be a problem until paid off.Hopefully you can do that and save the property.You would need a release of lien here and file it in the deed records.Then you have clear complete title.

RayAnswers :

The creditor would provide this when you pay it off.

RayAnswers :

Reference to liens in Hawaii for you.

RayAnswers :

I hope you are able to resolve this here.I appreciate the chance to chat with you.

Customer:

What if sibling 1 was to pass away, does the property get released of his lien?

Customer:

Just hypothetically.

RayAnswers :

No but you would have to file probate and the creditor can force sale of his interest in probate.

RayAnswers :

It would get more complicated not better.

Customer:

Okay. Thank you. For answering all of my questions.

RayAnswers :

These kind of things over time only get worse if unresolved.The lien here remains with the property unfortunately.

RayAnswers :

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This communication does not establish an attorney client relationship here.Information provided is not legal advice. Rather it is simply general information.

RayAnswers :

Thanks and good luck here.

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