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Law Pro
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Category: Real Estate Law
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Experience:  20 years extensive experience in real estate law, foreclosure, finance, and landlord tenant law.
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I sold my old house as short sale, second trust bank just reported

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I sold my old house as short sale, second trust bank just reported remaining balance as "charge off" on my credit report since we were liable for the amount, my wife was not on the mortgage nor the title, only myself. My lawyer that was in charge of negotiating with such bank could not make them settle for less than 35% of the amount owed, and since we did not have the money to pay that amount they said that they were going to report it as charged off. My lawyer said that even though that is bad record on my credit the bank they will not bug me at this point anymore. Again my wife was not involved in anything regarding this account.
We are now trying to get a house for investment in Houston (we are living in VA right now), loan and everything will be under my wife's name so I will not be included on it, and neither in the title, the house will be purchase in Houston.(community property law), my question is as follows:

Since the bank possibly could comeback to me looking to collect the remaining balance of the short sale, can they make us sell the new house in order to collect the money?? even though I will not be in the house title or loan or anything??? but just by the fact that we are married?.
Thx much.
Submitted: 11 months ago.
Category: Real Estate Law
Expert:  Law Pro replied 11 months ago.
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete excellent answer for you.

My name is XXXXX XXXXX I'm going to assist you with your question.

Please bear with me if you believe my answer isn’t coming fast enough because I’m also working with other customers too. I apologize for any seemingly late response.


Sorry for your situation.

That although this short sale and charge off occurred in VA - since you will be moving to TX - it's that state's laws that control the matter.


First they would have to transfer a judgment from VA to TX which they can do:

The State of Texas generally adopts the Uniform Enforcement of Foreign Judgments Act. (Civ. P. & Rem. C. 35.001, et seq.) Any judgment, decree or order of a court of the United States or of any other court is entitled to full faith and credit in the State of Texas (Civ. P. & Rem. C. 35.001.)

A judgment creditor seeking to enforce a foreign judgment may file with the appropriate court, an authenticated copy of the foreign judgment and an affidavit showing the name and last known post office address of the judgment debtor and the judgment creditor. Upon the filing of the foreign judgment and affidavit, the clerk of the court and the creditor are required to mail a written notice of the filing of the foreign judgment to the judgment debtor at the address given. The notice must include the name and post office address of the judgment creditor and, if the judgment creditor has an attorney in this state, the attorney's name and address. Lack of mailing notice of filing by the clerk does not affect the enforcement proceedings if proof of mailing by the judgment creditor has been filed. (Civ. P. & Rem. C. 35.004, 35.005.)

A judgment so filed has the same effect and is subject to the same procedures, defenses, and proceedings for reopening, vacating, or staying as a judgment of a court in the State of Texas and may be enforced or satisfied in like manner. (Civ. P. & Rem. C. 35.003(c).)


Once they have transferred the judgment to TX from VA:


A judgment entered in a court of the State of Texas is generally enforceable for a period of ten (10) years. If a writ of execution is not issued within 10 years after its rendition, the judgment is dormant and execution may not be issued on the judgment unless it is revived. (Civ. P. & Rem. C. 34.001.) A dormant judgment may be revived by scire facias or by an action of debt brought not later than the second anniversary of the date that the judgment becomes dormant. (Civ. P. & Rem. C. 31.006.)

A judgment may become a lien on the real property of a judgment debtor located in the county in which an abstract of judgment is recorded and indexed. (Prop. C. 52.001.) A judgment lien continues for 10 years following the date of recording and indexing the abstract; however, if the judgment becomes dormant during that period, the lien ceases to exist. (Prop. C. 52.006.)

A judgment creditor generally may request the issuance of a writ of execution thirty (30) days after the entry of a final judgment. (Texas R.C.P. Rule 627.) All of the property of a judgment debtor, not exempt by law, may be subject to levy and sale to satisfy the judgment. The levying officer is required to call upon the judgment debtor first to designate such property as may be levied upon. If the judgment debtor is absent or if no property is designated, the levying officer generally may execute upon any property of the judgment debtor which is subject to execution. (Texas R.C.P. Rule 637.) Personal wages of a judgment debtor generally is not subject to garnishment; however, any unpaid commissions for personal services, not to exceed 25 percent of the aggregate limitations prescribed by Subsection (a) of Section 42.001 of the Property Code, may be garnished to satisfy a judgment
.


However, you have "exemptions" in TX - which is property that a judgment creditor can't touch:


In general, a debtor may claim exemption of his homestead and certain personal property from attachment and execution of a judgment.

A debtor's homestead and one or more lots used for a place of burial of the dead are exempt from seizure for the claims of creditors. (Prop. C. 41.001.) If used for the purposes of an urban home or as a place to exercise a calling or business in the same urban area, the homestead of a family or a single, adult person, not otherwise entitled to a homestead, consists of not more than one acre of land which may be in one or more lots, together with any improvements thereon. (Prop. C. 41.002(a).) If used for the purposes of a rural home, the homestead consists of:


(1) for a family, not more than 200 acres, which may be in one or more parcels, with the improvements thereon; or

(2) for a single, adult person, not otherwise entitled to a homestead, not more than 100 acres, which may be in one or more parcels, with the improvements thereon. (Prop. C. 41.002(b).)

Personal property of a debtor which may be exempt from garnishment, attachment, execution or other seizure may include property having an aggregate fair market value of not more than $60,000, exclusive of liens, security interests, or other encumbrances if it is provided for a family, or an aggregate fair market value of not more than $30,000, exclusive of liens, security interests, or other encumbrances if it is owned by a single adult. (Prop. C. 42.001(a).) These property may include home furnishings, including family heirlooms; provisions for consumption; farming or ranching vehicles and implements; tools, equipment, books, and apparatus, including boats and motor vehicles used in a trade or profession; wearing apparel; jewelry not to exceed 25 percent of the aggregate limitations prescribed by Section 42.001(a); two firearms; athletic and sporting equipment, including bicycles; a two-wheeled, three-wheeled, or four-wheeled motor vehicle for each member of a family or single adult who holds a driver's license or who does not hold a driver's license but who relies on another person to operate the vehicle for the benefit of the nonlicensed person; certain animals and forage on hand for their consumption; household pets; and the present value of any life insurance policy to the extent that a member of the family of the insured or a dependent of a single insured adult claiming the exemption is a beneficiary of the policy. (Prop. C. 42.002.)

Other personal property, which may be exempt from seizure, may include current wages for personal services, professionally prescribed health aids of a debtor or a dependent, alimony, support, or separate maintenance received or to be received by the debtor or for the support of his dependent, qualified retirement plan, annuity or account. (Prop. C. 42.0021.)



So, within those exemptions is your homestead - which is completely exempt from a judgment creditor.

Moreover, since your name isn't or won't be on title to the property - they won't be able to touch the home even more.


Thank you so much for allowing me to help you with your questions. I have done my best to provide information which will be helpful to you. If I have not fully addressed your questions or if you have any follow up questions, or if I have misinterpreted your questions in any way, please do not rate me yet, but simply ask a follow up question without rating so I can provide you with a fully satisfactory answer.. I thank you in advance for taking the time to provide me a positive rating!

If you have any questions, about this or anything else, please ask for me, Law Pro, directly in the question and I will try to assist you as best I can.

For example, you would state, "This question is for Law Pro . . . (then on with your question).

I wish you the best in the future.

Customer: replied 11 months ago.

Hi Law Pro, very insightful your answer indeed, top rated attorney no doubt.....I did raise a little bit the price so perhaps you can answer one final question regarding the same case......


I am clear on your answer, although I need to know:


If my wife buys the house and a couple of years down the road she receives certain amount of money (to say 50k as an example) as a gift, and she puts all that money into the house loan, in theory the house will have more equity at that point right?? can that situation change the fact that the bank can not touch that house at all?? or because at that moment the house will have more equity then the situation may be different?? thx law Pro

Expert:  Law Pro replied 11 months ago.
Thank you. I tried to be very clear about how they would have to proceed and then what they could pursue if they did.

You asked:

If my wife buys the house and a couple of years down the road she receives certain amount of money (to say 50k as an example) as a gift, and she puts all that money into the house loan, in theory the house will have more equity at that point right?? can that situation change the fact that the bank can not touch that house at all?? or because at that moment the house will have more equity then the situation may be different??


Still the same answer - the house/home is completely exempt from execution by judgment creditors. [A debtor's homestead and one or more lots used for a place of burial of the dead are exempt from seizure for the claims of creditors. (Prop. C. 41.001.)]


This would also be the case if title to the property was in your name individually too - a judgment creditor can't touch your house (within those aforesaid parameters).

[
If used for the purposes of a rural home, the homestead consists of:


(1) for a family, not more than 200 acres, which may be in one or more parcels, with the improvements thereon; or

(2) for a single, adult person, not otherwise entitled to a homestead, not more than 100 acres, which may be in one or more parcels, with the improvements thereon. (Prop. C. 41.002(b).)]


If the house/homestead is within those parameters - they can't touch the house "period"!


Thank you so much for allowing me to help you with your questions. I have done my best to provide information which will be helpful to you. If I have not fully addressed your questions or if you have any follow up questions, or if I have misinterpreted your questions in any way, please do not rate me yet, but simply ask a follow up question without rating so I can provide you with a fully satisfactory answer.. I thank you in advance for taking the time to provide me a positive rating!

If you have any questions, about this or anything else, please ask for me, Law Pro, directly in the question and I will try to assist you as best I can.

For example, you would state, "This question is for Law Pro . . . (then on with your question).

I wish you the best in the future.
Law Pro, Lawyer
Category: Real Estate Law
Satisfied Customers: 24031
Experience: 20 years extensive experience in real estate law, foreclosure, finance, and landlord tenant law.
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