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Roger
Roger, Lawyer
Category: Real Estate Law
Satisfied Customers: 31023
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I was one of a group of partners in an LLC that owned condominiums.

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I was one of a group of partners in an LLC that owned condominiums. The bank foreclosed on the units and hit each of us with a deficiency judgement. This has all taken place in South Carolina. An attorney who represented the bank has sent a letter asking for me to submit a plan to pay them the deficiency and to submit a personal financial statement with my plan. I don't have the means to pay the bank the deficiency. Not now and for the foreseeable future. I work as an independent worker and don't collect a W-2. I am nearly 60 years old. The judgement is about two years old and has been on file at the courthouse for a little more than a year.

My question is: What are the options that the bank's attorney will possibly pursue and what actions should I consider to defend myself and my family's assets? Should I give the bank a personal financial statement?

My question

Roger : Hi - my name is XXXXX XXXXX I'm a Real Estate litigation attorney. Thanks for your question. I'll be glad to assist.
Roger : The bank's attorney does have a the right to pursue each of you to recover the debt. However, you don't have to cooperate and provide financial statements to him short of a court order or a judgment debtor examination (deposition-style exam to find out assets, etc.).
Roger : The only way to avoid this judgment is to file bankruptcy and have it discharged.
Roger : Otherwise, the creditor can garnish wages, bank accounts, levy execution against property, etc. in order to recover the amount owed.
Customer:

Would it help to tell you which bank I am dealing with to get a feel for how far they might go? One other thing I failed to mention. The deficiency was filed in the wrong county.

Roger : The bank it is likely wouldn't matter - - the main issue is whether or not the debtors have money/assets that can be seized and sold to pay down/pay off the debt.
Roger : Before the creditor can pursue writs of garnishment, writs of execution, etc., the judgment should have to be enrolled/filed in the county of your residence.
Roger : The bank's attorney is currently fishing to see which judgment debtors have assets to pursue -- hence, the request for a financial statement.
Customer:

Our main residence is worth maybe $220,000, in both our names and has a primary mortgage and line of credit for a combined total of $150,000

Customer:

I have two other real estate investments I am upside down on

Customer:

The only asset of any real value would be a commercial building but it is owned by an LLC and I have only a 1/4 interest

Roger : You've got a homestead exemption of $53,375 that would likely protect your home. Also, if the investment properties are under water, there's not much risk there.
Roger : Only property owned free and clear is lucrative to the creditor.....
Customer:

Even though I am only a 25% owner in the LLC that owns the building, I have considered talking to the bank that holds the mortgages on myy house and other properties about transferring debt and putting my shares in the LLC up as collateral. Might be hard for the bank's attorney to come after that, since there is an operating agreement for the LLC.etc

Roger : That's probably not a good idea because of the fraudulent transfer act.
Customer:

I believe a deficiency judgement is only effective for 10 years in SC

Roger : If you transfer property in an attempt to protect it from a creditor, the creditor can reverse the transfers and take the property anyway. Also, it doesn't make you win favor with a court.
Roger : A judgment is good for 10 years, yes.
Customer:

If the attorney and the bank determine that there is no chance to collect anything currently, is it your experience that they go away or do they come back several times during the remainder of the 10 years the judgement is in effect.

Roger : It's usually an initial inquiry, and if nothing turns up, that's usually it.
Customer:

But they can come back for the remainder of the ten years?

Roger : yes.
Customer:

Hate to keep asking questions but this has taken a few years off my life. Its 2:00AM here. Hope this is not keeping you up

Roger : It's only 1 where I am - - but, I'm going to sign off in a bit. If you have another question, I'll try to answer before I go offline.
Customer:

No I'm good. Thank for the help. Take care

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