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Attyadvisor, Attorney
Category: Real Estate Law
Satisfied Customers: 7075
Experience:  29 years of experience in General Practice, Real Estate Law and Estate Law.
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I have a somewhat complex question... I have a federal lien

Resolved Question:

I have a somewhat complex question...

I have a federal lien on me from 1999 for $95,000 (from a criminal case over 14 years ago). My wife does not have the lien, but because we live in Washington State currently, a community property state, neither of us are able to buy a home.

Question 1: We're looking to move to Florida, which I understand is NOT a community property state. Would she be able to buy a home in her name only in Florida, without the lien affecting her?

Question 2: Assuming the answer to question 1 is YES.... She is a stay-at-home Mom with no income. I run a legitimate at-home sole-proprietor business that makes us decent income ($150k+). Obviously a bank isn't going to give her a loan without a job, so is there any way for us to use MY income for HER to buy a house? What if I hired her for some legitimate work (as-in, we work and own the business together) and allocated most/all of the earnings to her in our taxes... would that qualify?

I don't want to commit fraud here, I just am looking for a legal loophole so my family of four can get in homeownership legally.
Submitted: 4 years ago.
Category: Real Estate Law
Expert:  Attyadvisor replied 4 years ago.
Hello and thank you for your question.

I don't know that your question is as complicated as it is problematic. The days of the no document loans are gone. It would be nearly impossible for someone without an income to qualify for a loan. Is there any possibility of paying off the lien?
Customer: replied 4 years ago.
Well first, can you answer question #1? If #1 is a no, then none of this matters.

As far as the lien goes, I can't pay it off... I just don't have that kind of money right now.

I do have plenty of business documentation... Tax returns, bank statements, P&L statements. I'm actually a single member LLC, which has the same tax laws as a sole proprietor, but we do have an EIN, two employees, etc. I'm sure we can get better than a "no doc" loan, can't we?
Expert:  Attyadvisor replied 4 years ago.

I am sorry I must have misunderstood you would be one of the named borrowers on the loan?

You are correct, Florida is not a community property State. If you are the only person named on the lien your wife would not be responsible under Florida law.

Customer: replied 4 years ago.
No you are correct, I just want the loan for my wife, not me.

But if I add my wife as an employee on payroll, or maybe just put all of the business in her name, or hire her as a consultant, or some other legal means, would the business documentation work for her?

Just looking for a way to make the loan work for her. She is familiar with the business, she has and can do work for me, i can even put her on payroll for a high salary for just daily consultation work, but I also don't want to commit any kind of fraud.

What do you suggest?
Expert:  Attyadvisor replied 4 years ago.
If she made enough money to qualify for the loan on her own she would be the only name on the title.

If she were the owner of the LLC it would be possible to have the LLC purchase the property.

Can you tell me if the debt was incurred while you were married?
Customer: replied 4 years ago.
No, I was ordered to pay the money 5 years before we got married. I didn't even know her at the time.
Expert:  Attyadvisor replied 4 years ago.
Then this is not her debt under community property law. If she can show an income sufficient to qualify for a loan she should have no problem purchasing a property.

If you decide that you want to move forward with a home purchase I would contact a Florida Attorney at that time to discuss placing the property into a trust.
Customer: replied 4 years ago.
Thank you I will accept your answer after this one last question...

What is the advantage or reason for placing the house in a trust? Should she buy the home or should the LLC buy it? Just wondering what the best way to do this would be.
Expert:  Attyadvisor replied 4 years ago.
A trust makes it harder for creditors to attach liens. An LLC can afford some of the same protections a trust but not all. A trust is a little more complicated for creditors to attach liens. There are also tax and inheritance benefits. As long as your wife is legitimately earning her salary you should be fine.

This would be something to discuss with a Florida attorney if you decide to move forward with a purchase.

Please feel free to ask me any follow up questions that you may have for me.

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Expert:  Attyadvisor replied 4 years ago.
Thank you..