Removing a mortgage lien using state homestead law

[tekwoman1]

What is the name of your state? Arizona

I would like to put my home up for sale. I currently have a $60,000 lien that was put on my home resulting from a civil lawsuit that was defaulted against me because I was unable to show up for the court proceedings. I still owe aprox $70,000 to the 1st mortgage. The mortgage is up to date and current. Arizona has a $150,000 homestead law. Can I sell my home for the market value which is about $220,000 and then file something with the court to squash the lien? Doesn't this situation fall under some sort of lien avoidance procedures since after the sale there would be no funds left once the mortgage and homestead amounts are paid? Any help would be greatly appreciated.

 

[JETX]

I would like to put my home up for sale. I currently have a $60,000 lien that was put on my home resulting from a civil lawsuit that was defaulted against me because I was unable to show up for the court proceedings. I still owe aprox $70,000 to the 1st mortgage. The mortgage is up to date and current. Arizona has a $150,000 homestead law. Can I sell my home for the market value which is about $220,000 and then file something with the court to squash the lien?

No. However, you can sell the house for $220k, pay the $70k on the first, and pay the $60k on the judgment. You walk away with $90k... and a signed 'satisfaction of judgment'.

Doesn't this situation fall under some sort of lien avoidance procedures since after the sale there would be no funds left once the mortgage and homestead amounts are paid?

No. See above.

 

[moburkes]

OP, common sense would tell you that you wouldn't be ABLE to sell the home until the 2nd lie is satisfied.

 

[JETX]

OP, common sense would tell you that you wouldn't be ABLE to sell the home until the 2nd lie is satisfied.

What the hell are you talking about??
What is a "second lie"??
Do you mean second LIEN?? If so, there is NOTHING in this thread to even suggest a second lien exists..... or that there is a second LOAN obligation.
Anyone with COMMON SENSE would know that.

 

[moburkes]

What the hell are you talking about??
What is a "second lie"??
Do you mean second LIEN?? If so, there is NOTHING in this thread to even suggest a second lien exists..... or that there is a second LOAN obligation.
Anyone with COMMON SENSE would know that.

My bad for the typo. 2nd lien.

I currently have a $60,000 lien that was put on my home resulting from a civil lawsuit that was defaulted against me because I was unable to show up for the court proceedings. I still owe aprox $70,000 to the 1st mortgage.

why would you say there is no 2nd lien?

 

[tekwoman1]

Then instead could I file for chapter 7 bankruptcy using the Az homestead act to keep my home. Then after the bankruptcy is 100% discharged (including the $60,000 lien) sell the house and walk away with the $150,000 that I have in equity?

 

[moburkes]

Then instead could I file for chapter 7 bankruptcy using the Az homestead act to keep my home. Then after the bankruptcy is 100% discharged (including the $60,000 lien) sell the house and walk away with the $150,000 that I have in equity?

What is the nature of the $60k lien?

 

[tekwoman1]

What is the nature of the $60k lien?

I was sued in civil court by a communications company for what they claim was "theft of services". I was unable to attend any of the court proceedings for the matter because I was in prison at the time and was not timely notified. The judgement was entered against me by default.

Thanks for all your help!

 

[moburkes]

I was sued in civil court by a communications company for what they claim was "theft of services". I was unable to attend any of the court proceedings for the matter because I was in prison at the time and was not timely notified. The judgement was entered against me by default. Thanks for all your help!

I'm not sure that BK is what you need. You need to contact a local BK attorney, though. You should be able to get a free or cheap consultation.

 

[tekwoman1]

The Arizona Statute reads as follows:

33-1105. Sale by judgment creditor of property subject to homestead exemption

A judgment creditor other than a mortgagee or beneficiary under a trust deed may elect to sell by judicial sale as specified in title 12 the property in which the judgment debtor has a homestead under section 33-1101, subsection A, provided that the judgment debtor's interest in the property shall exceed the sum of the judgment debtor's homestead plus the amount of any consensual liens on the property having priority to the judgment. A bid shall not be accepted by the officer in charge of a sale under this section which does not exceed the amount of the judgment debtor's homestead plus the amount of any consensual liens on the property having a priority to the judgment plus the costs of the sale allowable under title 12. After receipt of a sufficient bid, the officer shall sell the property. From the proceeds, the officer shall first pay the amount of the homestead to the judgment debtor plus the amount of any consensual liens on the property having a priority to the judgment and then pay the costs of the sale. The remaining proceeds shall be applied in accordance with the provisions of section 12-1562, subsection A. If the sale does not occur, either because of voluntary abandonment by the judgment creditor or because no sufficient bid is made, the judgment creditor may not charge any costs or attorney fees incurred in connection with the sale against the judgment debtor by addition to the judgment or otherwise.

- Am I reading this wrong or what?? Doesnt the above statute mean that the amount of the homestead is paid in full followed by any mortgage liens and if there is anything left other judgments? Please help with understanding this, Thanks again!

 

[moburkes]

You'ev changed the subject. Now you're talking about a creditor forcing the sale of your home...

 

[tekwoman1]

No I didnt intend to change the subject. I just looked up the homestead statutes for Arizona and that is the only one I could find that related to the 3 things:
IE: The Sale of a home with a lien or judgement
Excercising the homestead law in Arizona
Disbursement of the monies after home is sold.

Is there such a difference between how the homestead law applies to a "Forced sale" Versus how it applies to a "Willfull Sale"?

 

[moburkes]

No I didnt intend to change the subject. I just looked up the homestead statutes for Arizona and that is the only one I could find that related to the 3 things:
IE: The Sale of a home with a lien or judgement
Excercising the homestead law in Arizona
Disbursement of the monies after home is sold.

Is there such a difference between how the homestead law applies to a "Forced sale" Versus how it applies to a "Willfull Sale"?

The above law only refers to the process a credit or may use to force a sale and how the proceeds are distributed afterwards. It has nothing to do with your original question.

 

[tekwoman1]

Great, thanks for all your help and your opinion! I disagree with you. You are not explaining anything to me. All you are doing is tip toeing around what is a legitimate issue and questions. I am back to my original scenerio. All I am trying to do here is sell my house and walk away with my $150,000 in equity. I know there is more to the homestead laws then just protection against a forced sale, that would be pointless. The homestead laws are intended to allow a person to start again fresh and not loose thier equity. I thought this was a good place to ask questions and get intelligent answers but instead I seem to be wasting my time!

 

[Ozark_Sophist]

The homestead law is to protect your house from being sold out from under you to satisfy a debt. What you are trying to say it allows you to sell your house out from under the debt. That will not work.

You owe the money. Sell the house and pay off your legal obligation to the lender and the lein holder.

If you don't want to pay the debt, don't sell the house.