Legal Question in Real Estate Law in California

Re: Deed Xfr 8yrs ago to Ex, 2nd trying to collect from me

The only way a creditor could put a lien on your house would be if they were to sue you for the debt and get a judgment. And if the debt was incurred during the marriage, chances are the statute of limitation has long since passed.

I think the first step is have an attorney review the exact status of the debt. If there is already a judgment, you might be able to get indemnity from you ex even though he filed for BK if he was supposed to assume this debt. This would be done by a family law attorney in your divorce case.

On the other hand, the debt may not be legally collectible and a strongly worded letter from an attorney should put a quick end to the communications from the debt collector. Feel free to contact me for a consultation if you need further assistance.

Re: Deed Xfr 8yrs ago to Ex, 2nd trying to collect from me

I would agree with Mr. Starrett that the debt is probably uncollectable. In addition to the reasons he mentions, if the "debt" relates to a home loan, the creditor is often obliged to look only to the collateral for repayment. That plus the statute of limitations should cover most situations.

There are vultures in the collection industry who buy old claims at five or ten cents on the dollar, then go around trying to shake down anyone who might feel remotely obliged by law or conscience to pay the debt, or are protecting a credit rating. Much of these old claims are not legally binding on the persons approached, for one reason or another.

A lawyer who can look at the documents -- understanding the origin and nature of the debt being asserted is important -- can tell you what defenses you have and can write the letter that will (probably) cut off further collection attempts.

Re: Deed Xfr 8yrs ago to Ex, 2nd trying to collect from me

Title was transferred to your ex, but you still had a loan agreement with the lender that you signed (right?). The loan agreement makes you responsible for payment. A review of your divorce papers is necessary. The papers may have instructed your ex to remove you from the encumbrances, such as mortgages, which could have required him to refinance. He may have breached that obligation.

Anyway, the purchaer of the debt cannot put a lien on your new house unless and until he gets a judgment against you, which means he needs to sue you first.

Give us a call or email if you have any further questions. We practice real estate and can help you.

Re: Deed Xfr 8yrs ago to Ex, 2nd trying to collect from me

It sounds as though the first trust deed holder on your former residence foreclosed and extinguished the holder of the second trust deed. As a "sold-out junior lienholder", that lender is able to seek to recover on the note which was extinguished in the foreclosure of the first trust deed holder, and this is irrespective of what was agreed upon in your divorce. Any person who signed the note (the promissory note for the loan you got and which recorded as a second deed of trust)can be held to be responsible for that obligation--likely, both you and your ex signed it. Of course, that sold out lender must first sue you and get a judgment, but a judgment is pretty hard to avoid, if you signed the note. Your belief that you no longer were obigated because your ex was to take care of this obigation in your property settlement, is not uncommon, but is way off-base; lenders and creditors of a husband and wife going through a divorce are not bound by whatever agreement the parties arrive at in the divorce and don't even know, nor care, what your arrangements are. While you may always sue your ex to recoup what this lender gets from you, it is likely that he has little or no money, or he would not have allowed foreclosure to take place.

Re: Deed Xfr 8yrs ago to Ex, 2nd trying to collect from me

When the beneficiary secured by a first deed of trust forecloses, the second and any subsequent encumbrancers are called frozen out junior lienholders. They must either redeem the property from the foreclosing senior, or lose their right to foreclose on the property encumbered by the debt.

Ms. Deming is quite correct. Although the 2nd can no longer foreclose on the encumbered property, the 2nd may sue to recover on the promissory note. If you signed the promissory note, you are personally liable on the underlying obligation. (For further discussion, see Roseleaf v. Chierighino (1963) 59 Cal. 2d 35.)

If you obtained a judgment in a divorce action, that assigns the debt to your ex-husband, you may want to have an attorney contact the creditor (the holder of the 2nd) with a certified copy of the divorce decree. It would appear that you have a judgment which may work to indemnify you for the debt.

My recommendation is to speak to a lawyer about the threat as soon as you can. The other attorneys are correct, you may have some other defenses, and the second cannot obtain a lien on your new property without proceeding through a lawsuit and obtaining a judgment against you.

Very truly yours,